About two weeks ago I got a signal in the GBPUSD, at that time, I set my stop entry order to go long based on a short term range breakout.
I decided to hold my trade over the last two weeks even during important fundamental announcements…
And finally, after almost 3 weeks, I got my alert: the market has reached my take profit order.
And you know something, it feels really good. Not because of the % of return (which by the way, it was awesome) but because even when I thought several times about closing it, taking partial profits, etc. I never deviated from my trading plan, and that feels really good.
It feels almost like at the crossing line at the end of a marathon. Just like that (alright… not that much)…
Anyway, here are a few things I learned during this trade.
Patience is the name of the game
When I opened this trade I knew the pound/dollar was more likely to continue its way up than going down. That’s all I knew.
You never know how much time it’s going to take the GBPUSD to get to my take profit order, no one knows – unless you got a working crystal ball, but most of them don’t work :)
The only thing that you need to do is to patiently wait for the market to hit your take profit order.
It pays to follow your trading plan
When you have a trading plan, all your trading decisions were made before your trade took place.
You know that if you follow your trading plan you’ll acting on your best interests.
And once you are in a trade, emotions kick in, they want you to take profits earlier, take partial profits, increase your trading size, average down, etc.
Dont do it. Just follow your plan and you’ll be fine.
I was tempted to take partial profits last week, just after the FOMC announcement, but I’m glad I didn’t do it. Because it would’ve been very difficult to get back in that trade (for a sound reason).
Of course sometimes you need to adapt, and take partial profits, etc. But make sure its part of your trading plan.
Dont take trading decisions at the heat of the moment, because I guarantee that they will not be on your best interests.
Fundamentals react in the direction of the sentiment of the market
Well, at least most of the time they do.
There were plenty of fundamentals over the last two weeks and a half, but most of them made the GBPUSD go up, regardless of the actual figure.
Now, it doesnt mean that every single time this is how the market reacts to fundamentals… nope, most of the time they do, but it’s not a rule!
The most important fundamentals have the potential to change the sentiment of the market, so you need be careful alright?
Prophets from the past
When I wrote my update about my trade last week, I’ve got a bunch of emails saying/asking how come I didnt take profits earlier… that it was so clear that I had to close my trade at the swing high, etc.
This is what they mean:
Yes, it’s easy to do it on the left hand side of the chart… the problem comes when you try to do it on the right hand side…
It’s impossible to try to capture every market swing.
And for that reason, the best thing to do is just to stick to your trading plan.
What do you think about my trade? Did you take it?
If you did, what did you learn from it? If you didnt take it, what do you think about what I learned?
And finally… what’s your take about the prophets from the past?
Please comment below!
Good luck in your trading!