Burn baby burn! The trade I have just executed is high risk and, if history is any guide, low reward. If I can be strong, it will be the last trade of its type.
The trade: Following the dismal Chicago PMI and US consumer confidence data I have shorted cable at 1.9085, with an extremely tight stop at 1.9094. The pair looks to have firmly rejected 1.91 the figure and could be in the process of rolling over, along with EUR/USD. Historically, the Chicago PMI and consumer confidence data tends to have little impact on the dollar but the currency has recently been battered by a very poor run of fundamental data and weakness is clearly the path of least resistance. Yet I fight it. I am always fighting it. What is worse is that I am fighting the multi-day trend with an intraday position with a tight stop, and thus I am inviting failure. Previously, when I have called turning points correctly I have failed to follow the trend lower and have instead grabbed at the small profit on the table. So, during those few times when I have actually had a winning trade in my hands, I have killed it prematurely. The strategy magnifies and amplifies my many weaknesses. There is something in me telling me I ‘deserve’ to be punished, that I am not worthy of success. I think it was Ed Seykota who said everybody gets what they want out of the market.
I expect this trade to fail. It deserves to fail. I am off to have my dinner and will provide an update before day is through.
Update (8:39 pm): Cable failed to roll-over as predicted. At one point the trade was 10 pips out of the money, then it moved 10 pips in the money. After my dinner, when the position was some 5 pips in the money, I moved the stop-loss to break-even and left it at that. Of course, such a tight stop is borderline useless and I may as well have taken the few pips that were available. The position was stopped out at break-even. To repeat what I said earlier ‘If I can be strong, it will be the last trade of its type. ’