Not Waiting for Confirmation Can Cost You
When you don’t wait for the proper signal it will usually cost you. My trade selection was spot on today, and I was proven right by the market. But I actually lost money. I lost the money because I lost my proper mind-set. I lost my proper mind-set because I let impatience and over-confidence effect my decision making.
I had already targeted both EURUSD and EURJPY for sell signals after seeing the trends already in place. But rather than be patient, I let excitement effect my judgment, and I bit on the first wiggle. I knew right away that I had jumped the gun and not waited for the definitive trend shift, and at that point I’m in trouble, because I’m out of my element.
When you follow the rules explicitly you will find your comfort level remains steady. Trading is much easier this way, and even if the market goes against you a bit you know you did what you were supposed to do, and you know not to do anything else until you get the signal to exit.
In my case I had gotten short ahead of the actual shift. Regardless if my intuition was right, regardless if I had the overall trend my way, I had taken the bait with the hook in it, and my decision making process was off kilter because of it. When an experienced trader talks about having “a feeling” what he is referring to is his comfort level. It generally means he did what he was supposed to do and he knows he is where he is supposed to be. The other side of that is he varied from his plan and the wheels aren’t on the track anymore. This fine morning, rather than risk losing more than I already had, I just pulled the plug and took the small loss, very mindful of the mistake I had made. �
It didn’t bother me that I was actually right on the market, and after I exited the trade, the market did go down nicely. I actually felt good about that. I also felt good about learning I still had a weakness in the shadows — impatience. When you shine a light on a shadow the shadow disappears. What did bother me a bit was how that mistake broke my concentration…I actually hit the shower right after that, instead of focus in and catch the next bus. But as we all now, there’s always another bus coming along.
I learned along time ago that in trading we learn much more from our mistakes than from our winners. In this regard it was a good morning!
Jay Norris
To attend a webinar on technical analysis given by Jay Norris on Thursday go to:
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THANKS VERY MUCH FOR SHARING WITH US. I REALLY ENJOY AND LEARN FROM ALL YOUR WRITINGS. I HAVE BEEN CATCHING THEM IN FOREXFACTORY. I HAVE MADE THAT MISTAKE SEVERAL TIMES AND I AM STILL WORKING ON MY DISCIPLINE BUT YOU ARE RIGHT, TEMPTETION LEADS TO INPATIENCE AND IF WE FALL WE ALWAYS PAY THE PRICE. IF WE CAN UNDERSTAND THAT ANOTHER BUS IS COMING.
THANKS AGAIN.
Happens to the best of us…!