Nov8 – When it’s too volatile for you, then DON’T trade :-)

Probably heard this many times: One pivotal advantage that retail traders have over traders managing other people’s money – we are not forced to trade.  

Today is a day I am not going to trade – hugely volatile day yesterday across the board – FX pairs, equities, commodities – thanks to an unexpected ECB rate cut and better-than expected advance US GDP.  I am going to protect my bankroll and just observe in JBT today.

 

Recap on yesterday:

I had an ok session in the JBT room yesterday – actually losing 0.37R (2 losers and 3 winners) – exiting my positions ahead of BOE and ECB rate meetings.  Unfortunately I did put on a small EURJPY position 15 minutes prior to the ECB rate announcement – this broke several trading rules – and resulted in a loss of 120 pips (it was only £100, but it’s the principle that’s important here!)

  • Rule 1: Always enter a stop loss when entering a trade
  • Rule 2: Trade only when I believe that I have an edge
  • Rule 10: There’s no “just this time” or “but this time it really is different” excuse for breaking a trading rule
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2 Responses to Nov8 – When it’s too volatile for you, then DON’T trade :-)

  1. One thought I had (whilst falling asleep) is how to protect swing positions during major news announcements – that would be to use fx options. Same way that fund managers might buy put options to protect their long portfolios. I would buy some short-expiry options to protect any swing positions that I might have.

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  2. Pingback: 4/11 – Weekly FX Trading & Signs of Progress over last 3 years | Trick or Trade

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