Happy Friday everyone!
We’re finally at the end of the week , just a couple hours away from the close of the Forex market. I wanted to give you guys an update on how my Pick of the Day from Wednesday went. It’s safe to say that things didn’t pan out exactly the way I wanted it to but in this business, it is expected that sometimes the trades will not work out. It happens to everyone, even the savviest investors out there, this is a fact that we must all accept to work in this business. The objective is to make successful trades at a minimum 80% of the time. Think of it as winning 4/5 times, which I don’t think is a hard goal to reach at all. No one likes to lose, it can be a hard pill to swallow but when it happens, we shouldn’t let it get the best of us. This is why the capital you use for trading should be cash you can risk losing, not using your rent or bill money to make a quick few bucks. That would be risking far too much, and it really won’t be worth it because the stakes would probably not tip in your favor.
Ok, so here is the chart I posted on Wednesday 3/4/09:
And here is an updated chart for today:
What do you see when you look at these two charts? Notice how the tide completely changed? I knew that things could change at any time, it is the nature of the FX business especially since the pair had moved so much to the upside already, but I didn’t expect such a huge, dramatic change. The pair has completely retraced its nearly 30o pip move! Sure, it bounced up a couple times but didn’t hold to the upside at all. Earlier today, AUD/JPY bounced just over 100 pips before going sideways from approximately 61.80 – 63.10 .
Overall, today’s market has been very unpredictable(unstable even), up for a couple hours..down the next few, it can lessen one’s confidence when there is no defined trend. My advice would be that in a market where there are hardly any longterm trends in place, when you trade…you should only hold unto it you’ve made a good profit. Do not be overly ambitious(greedy) when it comes to short term trades, I cannot stress that enough. I know it’s hard not to feel that way because you want to be lucrative and when great trading opportunities are limited, we all get anxious. At the first major signs of the tide changing, you should exit the trade. Don’t let minor fluctuations get the best of you, they happen frequently even when the transaction is going in your favor.
So, AUD/JPY didn’t perform the way I wanted it to and I take it as a lesson learned. Like I said, we will all lose sometimes but it’s keeping your losses to a minimum that is vital. Don’t allow yourself to be wiped out all at once, hoping that things will turn around. Remember: Look at what the chart is doing, take it for what it is…not what you want it to be. Also, always manage your money properly…don’t try any get-rich-quick trades. It’s dangerous territory.
Hope you all have a great weekend! Be back on Monday for more Forex news and insight! 😀