Now wasn’t that sweet behavior for USDCAD, not wanting to quite dip to its uptrend line from November 2007. I have two long positions—one from 1.0394 and one from 1.0429. One’s up 122 and the other is up 156 pips as I write this at 9:48AM EST. Unfortunately, with the thin liquidity where moves can be exaggerated, it doesn’t mean the pair won’t drop again but obviously I’m profit stopped.
What I didn’t talk about yesterday was why I was buying at all. Why do I have any belief that the USD is turning up? If you’ve been following my little blog here since mid-October, you know I’ve been buying USDCAD when it dips. You could say, then, that I’m bullish. I try not to take those positions on trading—that is, I don’t log on each day saying “I’m bullish,” or “I’m bearish.” Rather, I try to stay aware to what the market is telling me. As Jesse Livermore allegedly said in Reminiscences of a Stock Operator , “My one steadfast prejudice is against being wrong.” Since I will be wrong sometimes, I look for entry points that let me get out without too much pain if I am wrong. While I’ve made the case in prior blogs that I believe this market is basing, I’m going into my long positions at points where I can find a reasonable stop.
I entered both these positions at points where I could have a reasonable stop. I’m now profit stopped and we’ll have to see what happens. The illiquid market could result in my trades being stopped but I can’t lose any money at this point so why should I worry? There are worst ways to go into the end of the year.
© Dianne Fecteau, 2009. No part of this material may be reproduced in any form, or referred to in any other publication, without the express written permission of the author.
My purpose in writing this blog is to show you how one trader, me, makes trading decisions and survives while trading Forex. One of the biggest problems I had when I first started trading was trying to apply the “rules” to actual trades. Another was the psychology—limiting losses and letting profits run. If you study my blog you’ll see how I deal with both those issues. So my writings are not trade recommendations but rather educational in purpose. You have to decide on your own approach to trading. Remember that trading is risky.