23 October 2009 – What a Day!

23 OCTOBER 2009 – What a day!

In case you didn’t know – WE ARE STILL IN RECESSION….well durr!

Today was the day that everyone and anyone who trades the forex will be talking about forever. The kind of story that gets told down the pub and to the grandchildren. The “where were you when Cable dropped EIGHTY PIPS in one 1 minute bar AND FOUR HUNDRED PIPS IN A DAY!.

Well I would love to tell you that I traded that one – but I didn’t. So for me this is the “one that got away tale”.  I sat here this morning watching mesmerised as cable fell ….and fell. And EURGBP rose ……and…rose, no retracement, no little pull back. Nothing. So I just watched from the sideline like a good little trader. ALL DAY!

A couple of trading buddies came over this afternoon, one did like me and just watched. The other tried to pick the bottom and go long cable only to find that it just kept on going.

News that the UK is still seriously in recession in spite of all the media commentary saying that this recession is over hit cable hard.

I am so glad that I was not caught long the pound when the news came out! Phew.

And in case you missed it – here is the chart.

Lessons of the day:

1. Be disciplined – don’t just jump in and hope it keeps going.

2. Wait for the pullback – if there is one – and then consider taking the trade.

3 Where EXACTLY is the bottom?