Welcome to another addition to my blog - I hope that many of you who trade are doing well and particularly those who also trade GBPUSD. In this segment I am going to talk about my last installment and also this enormous downturn that GBPUSD has seen over the past month or so. I'd also like to mention a couple of other things such as how I plan to continue my trading and finally, how annoying some people on Twitter are, constantly trying to sell me things. Enjoy!
First things first, as I just said and as many readers will know, the dollar has been benefitting from a nice raly the last few months (i.e. has been getting stronger) and the pound sterling has dwindled. This has seen the exchange rate between the two drop from a several month high of 1.633 down to a current (Friday close of) 1.553. Those of you who follow my twitter and read the last installment on here will know that I have been bullish on the pound sterling and thought that it was actually going to turn around at 1.58... Then at 1.57... Then at 1.56... I have unfortunately seen a margin call due to this anti-trend mentality and the idea that I am good enough to foresee the turn around in the market. Since this happened last week I have spoken to several people about and they have been very helpful - one in particular has reminded me of something I had completely lost sight of; the market does what it wants, is only temporarily affected by news and it is often best to trade with the trend (reminded me of something I read a long time ago that said "the trend is your friend"). I would like to thank him again here for re-opening my eyes! In my trading so far I had become too concerned with the news that was circling my head and convinced that forex was much more like stocks - always looking to the news for direction etc.
Anyway the point is that I understand where I went wrong, know what I need to do to sort the situation out and have a plan for a comeback. I am going to put more of my time that I used to use on monitoring news and numbers towards chart analysis and seeing what has happened in the past and how the might affect trading now and later. Of course I am not going to be deterred - like many of you, I really enjoy trading and a set back like the one I have suffered, while significant, will not spell the end of my trading experience. It is just another step on the way to doing this in a more serious, full time manner (hopefully).
Hopefully none of you have made the same mistake I have and instead you have enjoyed the ride down from 1.63 profitting all of the way! I know some of you will be thinking "This is what stop losses are for, why didn't you use them?!" - my answer is that I do wish I had used them in this instance but in the past when I have been trading based on the trend and not news (for example when I had my rampant success at the start of my trading) whenever I used stop losses, I lost money at a rate faster than any other time. I shall continue without them but if I can imrpove my market entries more and more, then I will eventually consider them. On this occassion, my downfall was a combination of my inexperience, my focus on news and determination that I could predict the trend change, a downturn larger than any I have experience before while trading against the trend and finally, plain stupidity. Don't worry, I am working on them all!
That's a couple of points out the way, I'd also like to say that since I experienced the margin call, I have opened up to those of you who are predicting that the market may yet drop to below 1.53. I feel now though that is is genuinely nearing a stop for this decline and will soon rebound - I am going to need to look at charts and things for quite a while now though before I have some idea again of where my head should be at. We'll see. I said at the start that I would rant about some people on twitter constantly trying to sell forex robots, trading systems and other stuff often nothing to do with trading - basically that rant is here: it's really annoying. Yeah I didn't want to stray too far from forex chatter.
Finally, I am approaching a thousand followers on Twitter, really enjoying the feedback that I get on things I tweet - everyone who has re-tweeted me, replied to me, tweeted at me offering advice and talking to me off of Twitter (one or two on LinkedIn and one by e-mail), thanks VERY much for your guidance and support, you are all very useful to have in my trading arsenal. Hope you all enjoyed this bit of my blog and if you are here for the first time, I urge you to go back to my first posts and read more about where I was a month or so ago. Thanks ever so much for taking the time to read this and I hope you will be back for more in the future! Remember you can follow me and contact me @fxamateurtrader or e-mail fxamateurtraderuk@hotmail.co.uk - feel free to get in contact, I will be happy to chat about anything trading related! Thank you!
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