Forex Review: 2014-03-08
My conservative side bit me in the behind once again as NZD/JPY exploded higher rather than pulling back after the neckline break. Here’s a quick review of my missed trade.
Original forex trade idea: Inverse Head-and-Shoulders on NZD/JPY
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It’s one of my continuing issues, and that’s waiting for the “perfect” price. Everything lined up both fundamentally and technically, but I just wanted to squeeze a few more pips out of it by seeing if there was a retracement.
Instead, it’s another potentially better than 1:1 trade missed in the books as the pair shot up nearly 200 pips on both broad Kiwi strength ahead of a potential rate hike from the RBNZ, and a return to risk taking as the broad fears on the Ukraine-Russia situation cools down a bit. The strong Japanese yen reaction on Monday (gap lower) was reversed on Tuesday, and forex traders just ran with it from there.
So, with the pair now retesting the previous swing high around the 87.50 area, I decided to close my open orders to go long at 85.50. Missed trade.
Going forward, I’m going to try to remind myself about the fact that its always worse to miss a legitimate trading opportunity like this rather than taking a trade, being wrong and stopping out. While we definitely can’t win them all, our winners always have the potential to be much, much bigger than our losers with proper trade and risk management.
This currency trade reminds me of a quote from “The Great One:”
“You miss 100% of the shots you don’t take.” – Wayne Gretzky
Great quote and something to ponder during the weekend. Thanks for reading my blog folks…Have a great weekend!