23/11/09 – GBPCHF Bearish Desc Tri- Not triggered

Monday morning and setting up for my day and week.  Of the four options for me from my morning Relative Strength Analysis I like the look of GBPCHF short.

I liked the fact that there was CHF strength across the board and that there was a nice Descending triangle setting up. Also the lower line of support was lined up with S3, if that broke I felt this would be a ‘moo’ trade. Quite simply I’d keep selling till the cows come home. (I appreciate that pivot levels can be skewed on Mondays based upon how your charting package works out the levels but in this case there was enough price action / candles respecting the level to give me confidence).

My order was set to go short at 1.6718 ( 2 points below the low) with a catastrophe stop at 1.6760 ( quite wide for me) but I was happy that I would kill the trade far before that should it not go my way.

So the trap was set….but would it be sprung?  As you can see from the MACD there was divergence building so I was not holding my breath.

As you can see in the view above price did breakout……but it blew north which invalidated my trade idea. I removed my order and went back to looking at the markets.

Does that mean this was a bad trade?  Far from it.

Most Private Retail Traders are killed by a mix of over-trading and over-leveraging.  Amateurs love to be involved in ‘Trading’ – the buying and selling, the exposure to the market, the collection of profits and losses (mostly losses).  But the only people who make money from ‘Trading’ are the brokers.

I prefer to be a ‘Profit Planner’ and set traps for my trade ideas.  Should price enter my ambush then the trap is sprung and my trade plan is live.  Should price not do what I believe it will do then so be it. I remove the trap and go looking for other possible ambush opportunities.  I certainly don’t just jump on board the market at the first sign of movement!  The problem is most people find my style of trading boring, but that’s ok.  I know that having the patience and discipline to plan my trade and trade my plan is what sets me apart from the 95% of losers in Forex trading.

Onwards and upwards.