AUD/USD 4 April 2011 - Miss!

by Eva
(from Forex Trading Beginner)

Oh man... I lost 21 pips on this trade.

It was around 9pm (AEST) when I entered this trade, and I knew there was an announcement coming up on the USD at 11.30pm. I knew my limit was ambitious, but I thought "I'll just keep an eye on this trade, and if it turns against me I'll just pull out."

Alas, it wasn't to be. My trade limped along, a few pips up, a few pips down for the first hour. Then it began to come good, before going back flat again.

THEN, my trading platform told me that my connection was corrupted, and I needed to login again! This was just what I didn't need. By this time it was almost 11pm and I tried to login again, only to be told there was something wrong with the platform and to try again later.

"Oh well!" I thought, "This will just be left in the lap of the gods." This is whay I always trade with a stop - because you just never know when your technology will fail you.

I'd entered the market at 1.0372, placing my stop at 1.0351 and my limit at 1.0426 (yes, this was a little overly-optimistic). This gave me a position of risk at 21 pips and my potential reward was 54 pips.

When I logged on this morning, I noticed my stop-loss order had been filled.

Was I too greedy? If my strategy of keeping a close eye on the market and getting out just before 11.30pm had worked, I could have been a few pips in profit (certainly not 54, more like 10 or something).

Oh well, you live and learn - and this reinforces two of my strongest forex trading rules: 1 - always trade with a stop-loss order, and 2 - get out of the market when there's about to be an announcement on the currency you're trading!