Monday, July 31, 2006

Bias

Strange how damaging a bias can be, even when you recognise you have one.
This morning I had a long bias for the Euro having read some report from the IMF, that the USD may be undervalued for 10%-15%. It seems that put the $-Signs on my inner eyes. Can't explain, how I could remain otherwise in a trade which clearly was not working.
At 7:57am CEST the trade was taken long 1.2805. A 500+contract offer appeared and the Euro ticked down. I stayed, seeing that order as something which would disappear within 10 ticks and around 9am the uptrend would latest resume. It did, but stalled again at the 1.2803 level.

Globetrader_91

Instead of taking a small loss as warranted by the Price action I remain in the trade, seeing my account down for the day (small but still down).

 I took a HSI short instead which paid 35 ticks in a nice breakdown, bringing me on balance up for the day.

Globetrader_92

Only then, seeing Euro now again down 13 I moved the Stop to -15 and was taken out a few seconds later.
The account is green, but good trading would have been exiting the euro the moment it was not able to go above 1.2805. There was sure no reason at all to give it room down the the 1.2790 level.
The problem with the way I traded, is that I'm left doubtful of my own trading decisions, as I wasn't able to pull the plug the moment I knew the tradesetup was no longer valid.

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