Forex Challenge: Wk 7 -Mon- Equity UP: $567.75

Hi readers:

The only thing you can do that can change your outcomes, whether it be in life, your job, your marriage-- or trading; is execute as you have planned.

Lack of planning is the greatest pitfall in achieving greatness.

I got an email from a reader of this blog with this question:

What is the procedure to follow if you miss your entry on FirstStrike or OneNightStand? Is it ok to place a limit order in the market where you should be filled, or should you just enter the market with smaller size and the same position stop? Or,  should I just consider it a missed trade and go on?

Tammy G.
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Thanks for the note Tammy.

The first thing that we need to address is: why wasn't your order filled?

Was it just an accident? Then no problem. Take the trade with smaller size and the same stop as soon as you find out your mistake.

If the trade has moved substantially and it doesn't make much financial sense to take the trade, pass and resolve to not make an error like that again. One missed trade, even a big one, surrounded by years of correct trading is insignificant.

If the order was not filled because you didn't put in the order and thought you could "work" it to get a better fill, you may have a potentially serious problem. I'll talk about this in a minute.

FirstStrike price orders for this week, placed Monday morning after midnight, got reached quickly. There is a human tendency that rears its head after familiarity with a trading method like this, a whispering inside your brain that says after the raw signal is triggered, "I can get in at better price than that, just wait a minute or two."

And the voice is right most of the time to a degree. If a trader trading a breakout method counts on a retracement to get filled, every once in a while you get a week like this where most of the trades kept right on sailing after getting filled. Very little backing up. If you insist on using discretion in trading a breakout method like this, make sure you have a "hail mary" order placed at which point you absolutely will be placed in the market.

Why do you think I'm mentioning this? Because I've played all those games already and sometimes still do-- sometimes very successfully-- other times woefully not. After years of taking so many trades, I probably gain slightly overall by my discretion, but rarely enough to make the constant effort worthwhile.

I also mention these things because I still have to keep a watch on myself--after all these years-- to not fool around when placing trades.  You can't profit from a MISSED winning trade.

Cautionary Note:

Trading done correctly can almost get boring and the trader's respite from boredom is creating some tension that keeps him interested. So, a trader invents a "need" to fiddle with entries and exits to validate his mind's ability. And, when fairly new at the trading game, it can cost you because missing one great trade that doesn't retrace to get you in can be exactly the one that could've made your month or even your quarter.

Missing great trades hurts you worse than any string of losses. Losses are inevitable. Missing a trade isn't inevitable. It is your job as a trader to NOT miss a trade. Develop a problem executing and you're done as a trader. If not sooner, then later.

Fortunately, I took all of this week's FirstStrike trades right on the numbers and immediately as they happened. So far the week is shaping up well, but it is a long week until Friday afternoon.

I have these FirstStrike trades entered today:

EUR/USD: SELL 1.4487, stop 1.4547.
GBP/JPY: SELL 207.87, stop 208.47.
GBP/USD: SELL 1.9472, stop 1.9532.
USD/CHF: BUY 1.1087, stop 1.1027.
USD/JPY: SELL 106.24, stop 106.84.

The profits are good in the GBP pairs. At one point the short GBP/JPY position had almost 300 pips of profit.

We'll have an interesting week no matter what happens.

See you tomorrow.

Joel Rensink
www.infiniteyield.com

PS: To receive the FREE! trading rules for the Infiniteyield Forex Challenge ($499 value) and the semi-monthly newsletter about this challenge, send an email to: newsletter@infiniteyield.com and tell me to which address you would like it sent.