Thursday, March 16, 2006

Separate trades

It's really important to perceive each trade as being completely separate. I just closed a position that netted me 17 pips in profit. Initially I was a little worried that I wouldn't make back the 12 pip loss I had suffered on my previous trade. This was a silly thought process. There were four trades this morning:
  1. My first closed at -11 pips; I actually entered this position last night but technically it happened today. I was able to ignore this loss since to me it happened last night.
  2. The second closed at +17 pips and the price continued to drop;
  3. So I opened my third position which closed at -12 pips. I realised that I should really have waited for the retracement or at least stayed in the trade past the retracement so I wrote the preceding post (which is still valid by the way).
  4. Then I opened my fourth which closed at +17 pips and which I held through two retracements until it started sniffing around some pretty strong resistance and hit my T/P.
These four trades were independant but I perceived three of them as being linked. Had I not been disciplined, I would have closed my fourth after "recovering" the loss of the third. Instead, I stuck to my guns and thought I was right and ended up getting an "extra" 5 pips out of the trade.

Important: No matter when they happen in time each trade is unrelated to all the others!

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