A horrific day at the markets today. Never underestimate the effect of news! In fact, never forget! I was casually watching the eur/usd chart when all of a sudden I saw a flurry of activity. At once, I assumed some major news just came out, checked my economic calendar, and sure enough, US unemployment figures had just been released. More importantly, unemployment was below the forecast.
Any divergence from the forecast = volatity. Before I could react, the euro began crashing and fell about 40 pips.
Never ever enter a trade emotionally. Being the nub that I was, I didn't want to miss out on such easy pips and decided to go short. Alas, I had entered the tail of the euro's dive. The retracement hit my SL and I lost around 10 pips. I entered two more shorts as the eurusd ranged and retraced, and lost both times. When I was down 30 pips I thought "fuck it" and quit.
It was a very expensive lesson. I got greedy. When I saw the euro plummet, I fantasised it would keep on going. Lesson learned. If you don't have a plan, never enter a trade. I pretty much wiped half of my winnings for this week.
- Never trade without a plan
- Never trade emotionally
- Always prepare for major news beforehand