The importance of sticking to your Trading System – GBPUSD Forex trading
The graph today looks like a simple and straightforward set up… the upper barrier is 15288 and the lower band 15236. The market broke towards the downside and one would have claimed some nice and easy profit.. this is the trading system that I should be trading… however, I lost today!!
The biggest problem here was that I did not follow my trading system… to be a good trader, one needs to be disciplined and follow his or her system… I’d been talking about this and yet, I didn’t follow the system.. ugh! The good thing about putting all this into a blog is that I can review what I have been doing.. I find that if you don’t write something down with your thoughts, what you remember seems to change. It is good that I can write that I didn’t follow my system and as a result, I can see the consequence of it… I lost.
The other good thing about writing it all down is that I can write down my thought process at the time of trading.. why did I make the trade, what was my thinking behind it etc. I also shouldn’t leave it too long to write why I did the trade else one forgets….
So, what did I do? Well, the first thing which I was thinking was that he distance between the top of the range to the bottom was quite large at just over 50 pips.. this means that any loss is going to be a 50 pip loss. I also have it in my mind that the more the market moves initially, the greater the chance of a pullback. The range is determined by taking the lowest and highest point between the hours of 4am and 7am. The thing is, the market at gone 6.30am had started to move quite sharply down… from 15280 to 15240.. a quick 40 pips before 7am… I thought that I had missed the move. So, what did I do?
As the market went down from 6.30am and retraced a little, I manually entered at 1.5244 with a 30 pip stop and 30 pip target. The problem is that the market had more to retrace and reached 15282 before it promptly fell. I got stopped for -30.
If I had followed the system with a short at the break, it was 30 pips in the bag. If I had my second trade which runs for 60 pips, it would have worked out too. It could have been 90 pips in the bag today!
