Patience and Letting the Market Lead
It’s too easy to let our own habits and thinking get in the way of doing what the market tells us to do.
Last night I had sniffed out a nice sell set up in the EURJPY. It was still too early however to get short based on price action on the daily. It was even too early to go in on the 240 minute chart. I needed a close below that yellow line on the 240 minute chart — see below – to trigger the short trade.
Very straightforward, very simple. Except the close of that candle doesn’t come until 11:00 PM my time. And me, being a creature of habit– I go to bed at 9:15 PM at the latest – and prone to thinking and worst rationalizing , decided to follow my routine and go to bed and hope we got one more rally to sell on Friday morning on a lower time frame. So by listening to myself and not the market, I missed laying into a nice trade.
What I did wrong: I exhibited no patience, and listened to my own internal voice instead of listening to what the market was telling me to do. Had I stayed awake long enough for the close of that candle, I would have gone to bed a little late but knowing I did the right thing by the market, and I would have woke up to a nice profit.
The lesson learned: be patient, listen to the market. Be aware that my own habits and thinking can be counter-productive to carrying out my trading plan. Let the market’s behavior dictate my behavior.
Jay Norris
800-971-2154 / 312-896-3986
jnorris@brewerinvestment group.com
DISCLAIMER: Futures, options and Forex (off-exchange foreign currency futures and options, or “FX”) trading involves substantial risk of loss and is not suitable for every investor. The valuation of futures, options and Forex may fluctuate, and, as a result, clients may lose more than their original investment.
i am in your shoe too ,only that plus euro today during london session i called attention of my wife to the fact that 10mins chat of proact tells me too much pressure to downwards pressure,but in my own case i allow my analysis to get in instead of listening to the market ol boy i loose a fortune not exiting long on time..even now the pressure is still high and i think reversal is on the way for long euro
At least you did not “guess” the market and said to yourself “I recon this will close below the yellow line, so I will just go ahead and short now. Iam sure it will turn out good by the morning”. That in itself showed very good discipline.
Iam not sure, but if this type of scenario occurs in the future, but how feasible/realistic is it to instruct one’s broker’s, by phone, the instruction:- “If the Euro Yen closes below xxx.xx in the 240m chart, then Short it for me, and within 10 pips of bar’s close; and place my stop at 134.55″ or “If the Euro Yen closes below xxx.xx in the 240m chart, then please ring me and let me know, then I will go ahead and place the trade myself”
With the advent of electronic trading maybe all those days gone now? It would be nice for a broker to be customer dedicated to his/her clients like that! It may still exist.
Still in my humble opinion I think excellent discipline was demonstrated in this situation, simply by not getting ahead of one’s self.