So Much for the "Good Start"

I sabatoged myself.  I took a loss of $3400 last night!  Ouch!  That one still stings.

So how did this happen? Monday morning I had been scalping along and I had been doing well going LONG the Kiwi.  I felt like the rise of the Kiwi was peaking.  So I went SHORT around 9:00am.  I thought that it could move a lot so I set my take profit (TP) at 40 pips.  It only went about 15 pips and then reversed, I had manually moved my stop up and I was stopped out at +1.5 pips, so I still made a small profit on that trade.

Over the next couple of hours the Kiwi kept moving up and I read some analysis reports that sounded favorable to the Kiwi continued rise, and I bought into the sentiment.  This was my first mistake, listening to a "talking head" rather than doing my own analysis.

Next, I second guessed my own analysis that the Kiwi had peaked for the short term, I reversed my own sentiment and opened a LONG position in the Kiwi.  This is mistake number two.  I had a TP of 25 pips and stop loss (SL) set at 17 pips. 

Mistake three is that looking at the charts, the RSI was still positive but the MACD was muddled and according to my own rules this was not a valid signal, so I had ignored my own trading rules, in addition I was also trading at the worst time of the day.  I initiated the trade around 4:30pm (AZ time).  I keep telling myself not to trade the Asian session unless I get in after about 6pm when Japan and China are in full swing because the volume just inn't there.

Well this trade immediately turned on me and the Kiwi started dropping.  As it got near my stop, I was hoping that it would reverse and keep my win streak alive and then I made the biggest mistake and I removed my SL.  STUPID! STUPID! STUPID!

To make a painful story shorter, I started using "happy hope" that the market would reverse and come back up, but then some real news came out from the Reserve Bank of Australia (the Kiwi does whatever it's big brother does and tracks it tick for tick most of the time and this time was no exception), and they said they were keeping interest rates the same but would think about reducing them in August.  To add to this the RBA governor said he thought the Aussie dollar was still overvalued.  This send the market into a tailspin and before I knew it I was -60 pips.

I decided to hold one through the Europe session.  It did make a modest recovery and I got back to almost even, but was still -15 pips by about 1am.  I should have got out then and taken my loss, but no!  Happy Hope was still swirling in my brain and the US session killed me.

I rode it all the way down to $.7715 from $7830.  I semi-panicked when the Europe session started again and closed my position not wanting to suffer any more losses. 

There was a big international conspiracy.  Everyone was waiting for me to close my position so that they could stick it to me.  As soon as I closed my LONG postion, I went short (because the "trend is your friend" and that is what all the talking head analysis was saying that it was going to go lower still).  This triggered a reversal in the market and the Kiwi rose all the way back up to $.7790 (-40 pips from my original trade, I could have gotten out with only this weeks gains as a loss).

Of course since I was "mad trading" at this point, I didn't have a stop in so now I'm sitting on a trade and I'm -65 pips.  Grrrrrrrrrrrr!

None of this would have happened had I stuck to my rules of engagement.  Instead I'm kicking myself in the head over what could have been.  Who knows, if I was an "obedient trader" I could be up another two or three thousand more dollars in my account. 

More valuable lessons to learn as a trader.