7/12/09 – The challenges of Target Fixation. Golden missed opportunities on the Cable.

December 7, 2009

FX Trading, Trading Set-ups

After a positive week last week and an eventful day on Friday I was looking for some good set-ups this morning.  I was focusing on the 5 min Cable chart as can be seen below.  After the swing into dollar strength on the back of Fridays NFP numbers I was looking for a chance to short GBPUSD so was waiting for a possible pullback and reverse to trade.

At point 1 there had been a level of resistance which at point 2 we can see that price broke north of there but demonstrated no conviction in either direction.  This was where I made my mistake.  I was looking purely at the 5 minute chart and saw none of my particular set-ups.

I do trade reversals however I’m very fussy about trading them, I don’t just jump on any reversal but will wait and wait for particular set-ups that I know, like, have tested and trade well. So when I saw no reversals set-up on the 5 or 1 min chart I was deemed to sit on my hands.

Naturally price dropped nicely and then at point 3 price formed a congestion pattern.  In hindsight this would have been a chance to get on board but I’m notoriously bad on jumping on a speeding train.  If I deem price has already started running on an intra-day basis then I just leave it as I figure I am just chasing as opposed to attracting the best trading opportunities.

So I’m sat on my hands when price drops nearly 200 points from its highs.  This leaves me unusually grizzly as when i look at the 15 min chart I see that there was a very nice reversal set-up that I use and could have been in from approximately 6500. Grrr.

The one thing that eases my pain (slightly) is the knowledge that my overnight shorts on NZDJPY and EURJPY have hit target for a total  of +149 points profit.

 However I have to learn from todays experience not to get target fixated on just one chart and one entry point.  When intra-day trading on the short timescales it’s very easy to get overly focused on the wrong elements.  Here I was lucky that there was only an opportunity cost as opposed to a physical loss to deal with.  Hopefully you the reader can learn the same lessons from my missed golden opportunity! Back to the charts.

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About FXTraderPaul

A professional Trader and Coach, FXTraderPaul blogs about his adventures from the front-lines of FX Trading. A Trader and educator who can walk the walk as opposed to merely talk the talk!

View all posts by FXTraderPaul

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