Tuesday, May 12, 2009

Poor risk management

Yesterday the market took out all my lower levels, and even broke below those levels in the Tokyo session. I made the worst possible decision which was to hold on for the bounce. Well, it came and I exited today break even, but this is not the proper way to hold a losing trade, I had no confidence price would bounce back this aggressively--lucky though, it did...

This is a continual struggle to take reasonable losses when themarket presents them. This morning during the Tokyo session, there was a very clear buy signal but I didn't take it because of my clouded judgement holding a position left over from yesterday.

Resolution: to trade the bands for exits. Yesterday should have had 3 losses and 6 wins. Instead I had 3 buys and all exited break even on the following day. No profit to speak of.

As the AA guys like to say: it works if you work it.

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