Dangerous ground – didn’t obey the System but made a Profit – GBPUSD currency trading
Today when I had checked the markets, the GBPUSD had already moved up quite significantly.. this made my channel rather wide at 55 pips or so. I’m always conscious when the market has moved away like this as it should pullback before it makes another ascent. However, the market looked like it was heading upwards so when the market started to pullback, I entered long with a 30 pip stop and a 30 pip limit.
My entry was at 1.5453, stop at 1.5423 and target 1.5483. The pullback was deeper than I had expected (I was within 3 points of being stopped out). However, the market resumed it’s uptrend and I got my 30 pips. If I had traded the usual breakout, I would have got in long at 15470 or so and the market would have stopped short of my target by a couple of pips.
Now, the difficulty with trading like this is that I have not followed the system but made a profit. Us humans learn by trial and error but this situation has ‘encouraged’ me to disobey my trading system. This is rather dangerous as it reaffirms what is incorrect in trading. I know this may seem trivial but our subconscious is wired to keep doing what is good (in this case, make a profit) and avoid doing what isn’t good (lose money)… it is so ingrained into our subconscious so next time there maybe a strong temptation for me to just go and trade outside of the orginal system… especially since the system hasn’t faired well lately (and would have failed again today). Don’t underestimate trading psychology, people say that successful trading is 90% psychology and don’t overestimate your conscious mind power over your subconscious!
