I don’t know if you noticed the market didn’t go anywhere in the last Non-farm payrolls report (at least on most currency pairs). The market just moved sideways, with wild swings, making us believe the market was going move on one direction, and suddenly, it stopped and retraced back. This is the story of must currency pairs.
Unfortunately, I got caught in a few trades like this in the last two weeks. There is nothing to worry about, because we use a pretty tight money management technique, still it is important to point it out…
What we need to learn from this, is that, sometimes the market doesn’t want to be traded and we all need to have the clarity and objectivity to determine it.
We all get biases, some because they saw a forecast from another trader, others because they get inpatient about the market conditions and just want to trade, etc. But remember we don’t have to trade if the market conditions are not suitable for trading; staying out of the market is a trade decision, because we are not risking capital that could be at risk if we entered the market.
If we don’t find enough reasons to believe the market will continue in the intended direction, the best thing to do is forget about trading that particular currency pair and move on to the next one, if we end up with no clear market conditions on any pair, call it a day! And start all over again the next day, until you find the right market conditions to trade. That simple! We need to be patient!
Our job as traders is not trade every single day… Our job as traders is to make consistent profits trading the market, and we’ll only be able to get consistent results when the time is right to trade.
Have a great weekend you all!
Tags: forex education