Lesson learned: watch, confirm, don't be in a hurry!
This morning is a prime example.
I have been wanting to get into the GBP/USD, but have been waiting for the right indicators to show up when I am actually trading - i.e., not 5 hours before and now it's too late to jump in, because it could go either way.
So this morning, I woke up, turned on the laptop, and looked at GBP/USD. On the hourly, there was a sweet set-up - the 3 and 5 have just bounced off the 13! YES. And it looked like what Jordan calls a Shaq (yes, after Shaquille O'Neal) ... a HUGE candle. So, confirmed on the 15-minute and the daily - both indicate bullish - jump in, place that trade!
Ten minutes later, here's what the charts look like:
Hourly:
Daily:
15-minute:
Yes, the pretty blue circle is where I got in - we're talking a 50+ pip move to the downside as soon as I got in! But, the fact that that Shaq formed at all (I believe) indicates that there are what Jordan calls GBP "troops" just waiting to get in. Presumably the steep drop was because some were taking profit right away? Or something.
Okay, I admit, I'm hanging in this trade simply because I want it to succeed. I have my stop set far enough that it hasn't been triggered yet. And right now, actually, as I write this, it seems I may have read the sentiment correctly so far ... we're showing a slight uptick from that low ... it's only off about 30 pips from my entry!
The updated 15-minute chart:
I suspect this will be a bumpy ride for a while yet, so I'm going to watch this trade very carefully for the next hour or so before I have to leave and get a life and all that kind of fun stuff. Or maybe not - maybe I'll just try to have faith in my stop! :)
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Update: got stopped out just a couple of minutes later ... 60 pips. :)
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The lesson in this is: if you spot what looks like a HUGE candle forming, have a little patience: it may fizzle out just as fast as it formed!
But, as the title of this post says, that causes some upheavals in your gut, believe me.
The flip side? If I'd walked away from the laptop as soon as I set up the trade, I may never have seen this behaviour and wouldn't have needed to experience the swing as viscerally as I did. So, again, have faith in your analysis and don't sit and watch the pot - it doesn't need your help to get to boiling point. The market is going to do what it's going to do, and you don't have to baby-sit it!
Happy trading!
