Losing Trades and How to Cope

It is always hard to deal with trading losses. Here are some simple trading rules that might help to calm nerves, to avoid further upset and so to keep us on path to pursue our goals:

1. It is all about capital preservation. Each trading losses should not exceed 5% of the total capital.
2. Set stop loss level to minimise trading errors.
3. Do not let winners turn into losers.
4. Use stop loss to protect profits.
5. Do not add on losers for cost averaging.
6. Stay sway or cut your losses when you become indecisive.
7. Rather wait and see when the market trend is not clear.
8. Trade when the market is active.
9. Do not enter because you are bored, likewise, do not exit because you are impatient.
10. Do not overtrade.
11. Do not simply alter your trading strategies if not for a sound reason.
12. Always remember that losing is part of the game.

Trade The News 01-06-07 (Non-Farm Payroll)

"There was an initial spike as people saw the headline figure (Non-Farm Payroll) but the dollar quickly fell back after they realised it hasn't really changed anything".

Soon after the news, my long EUR/USD position was immediately stopped out at 1.3427 for -11 pips due to the stronger than expected job report. I immediately reentered another long position at 1.3423 (don't ask me exactly why ... may be partly due to buying at dip, not giving up etc. ). I noticed that the PCE report was actually showing a tamer rate of inflation. My position was gaining quick on my 2nd entry and I was able to exit for +35 pips just 4 minutes later. Since then, I have been sitting on the side line.

EUR/USD 1-min chart

Trading update: I am very close to my account target of Level 6 after hitting level 5 on Tuesday.

USD-CAD Sold Off

USD/CAD is continuing its descent through 30-year lows in the wake of the bluntly hawkish statement from the Bank of Canada. It is currently around C$1.0740 after notching a low at C$1.0737, its lowest level since Sept 1977, according to EBS.

Canadian bonds have tumbled in the aftermath of the Bank of Canada's policy statement, which clearly signaled that possibility of interest rate increases in that it referred to as the "near term." The benchmark 10-year bond is yielding 4.48%, from 4.41% Fri, with the two-year yielding 4.56% from 4.45%. [via Dow Jones Newswire]

USD/CAD 5 min chart

European Session 29-05-07

"The trend is in the euro's favor. The main driver is the rate sentiment in the euro zone, where the market is pricing in more tightening."

I hit my next account target (i.e. level 5) before the open of European session. As soon as I woke up this morning, I saw a golden opportunity and hence quickly exited my last week's open short EUR/JPY position at 163.25 for a gain of 34 pips. It was a ghastly experience holding on to this short position over the long weekend holidays. The position was in red most of the time and yesterday was actually quite painful watching over the meaningless price movement due to the market inactivity.

No trade made in this session. But look at this EUR/JPY. One-way traffic. What a reversal! I was fortunate as I did not hesitate to book my profit earlier.

EUR/JPY 5-min chart

Major Economic Events Ahead

28/5
UK/US Public Holidays

29/5
2:00pm CAD Interest Rate Statement
3:00pm USD Consumer Confidence

30/5
2:30am AUD Retail Sales
1:15pm USD ADP Nonfarm Employment Change
7:00pm USD FOMC Meeting Minutes

31/5
1:30pm USD GDP
1:30pm CAD GDP
2:45pm USD Chicago PMI

1/6
1:30pm USD Nonfarm Employment Change
1:30pm USD Core PCE Price
3:00pm USD ISM Manufacturing

Trade The News 24-05-07

European Session

Exit EUR/USD at 1.3440 for breakeven
Exit EUR/JPY at 163.20 for +7 pips

US Session

After Durable Goods Report

Exit USD/CHF at 1.2271 for -20 pips (Stopped out!)

Frustrated! Many times I found myself in trouble by jumping into a trade without good technical confirmation. Impulsive trading error.

After US Home Sales Report:

Exit GBP/USD at 1.9855 for +28 pips


Also exit USD/JPY at 1.2160 for +19 pips

Session rating:(value:+1); Accumulated so far: 4 stars

Trading Update

Kind of slow in the last few sessions. Finally, I gained some pips in this morning European session.

Short USD/CHF at 1.2290 Exit at 1.2262 +28 pips

In the mean time, I am one step closer to the target.

Accumulated so far: 3 stars.

European Session 21-05-07

Sneaky! I managed to exit my short USD/CHF at 1.2280 for -7 pips loss. However, I just could not able to reverse my dollar-bearish view yet to re-enter long on USD/CHF and subsequently sell EUR/USD at 1.3486 (even though I received confirmation from the technical chart). What I did was selling EUR/JPY at 163.60 instead, netting only +14 pips, but missing the action of a bigger move.

EUR/USD 5-min chart


Did this move (Euro 60-pips drop) catch anyone by surprise?

Session rating: - ; Level: unchanged at 2 star

Japanese Candlesticks

I have compiled some of my favourite candlestick combinations for you guys to check on. Just to make it clear that most of the charts you see in this site are simply 5 minutes intraday candlesticks covering two fixed trading periods. For European session, 8.30am - 11.30am UK time and for US session, 1.30pm - 4.30pm UK time. I am currently collecting them (charts) for my own research/reference purposes.

Bullish signals:-


Bearish Signals:

US Session 18-05-07

A tricky session. I smelled the rat but couldn't avoid falling into the trap after the release of US consumer confidence report. Two losing positions in a row, wiping my earlier gain on the CAD trade +29 pips.

Long USD/CHF -12 pips (a speculate trade that went wrong)


Short AUS/USD -11 pips (jumped in the trade too soon without further confirmation)


Session rating: - ; Level: 2 star