Friday, October 28, 2005
Stopped out
Ouch. Last night my dogs got out of my yard requiring me to go look for them. Because I was out looking for the dogs, I was up at 1:30 and pulled up the charts. I was very pleased that the Euro trade had gone up 40 pips. This morning when the economic news started rolling out it was quickly apparent that the GDP was going to help the dollar more than the Michigan Consumer Confidence was going to hurt. That being said, we are 5 pips away from being closed out of the trade. RESIST THE URGE TO READJUST THE STOP LOSS. Just because the pro USD push is running out of steam does not justify a change in the stop loss. Remember, if you have a stop at a major level, the institutions may have stop near the same level. If the big players hit their stops, it can cause a snowball effect. While I was typing this, we got kicked out of our trade and the pair slammed down another 14 pips beyond our stop.
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1 comment:
I don't fell it would set ourselves up for any trap. Setting up for a trap implies malicious intent. My point is, if there are bigger fish and the price pushes through the big stops, the currency increases momentum like one dominoe knocking down the next. The momentum of stops being triggered can push the price through the next stop over and over again.
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