Trading Day 11/02/06

This post covers two trading days, Wednesday, Nov 1st and Thursday, Nov 2nd.

Wednesday was a 'News Day' with the ISM Index scheduled for release at 10:00 AM. I executed three trades before the 9:00 AM ... up 8 pips and then made one of those really, really aggravating trading errors .... I was short the EUR and long CHF and intended to close the CHF trade but erroneously placed a second buy order!!!

I don't think I've done that but two or three times in all of the equity and forex trading I've done. That doesn't make it any less aggravating though ... and, I suppose if you're reading this and just starting out, it's good to realize even traders who have hit buy/sell keys thousands upon thousands of times can still screw things up occasionally.

Anyway, I learned long ago that it's best to step back a moment and assess what the damage might be ... rather than immediately pound the sell key. Afterall, I wanted to extracate myself with the least amount of pain and not make matters worse by exiting in a panic.

To make this a short story ... I was able to exit both long positions with a small loss ... down only a total of 6 pips. It wasn't quite 9:00 AM and, at that point, I was up a net of 2 pips.

OK ... ISM news was scheduled to be released in 1 hour. My thinking was that the Chicago PMI number was low and since the Chicago number and the ISM number have a 80% + correlation factor, and since there was absolutely no obvious contradictory data ... then, chances were very good that the ISM number would disappoint - meaning most currencies would rise against the USD.

So ... I placed my bet. I went long GBP at 1.9085 with a stop at 1.9067.

The News was released at 10:00 and I exited at 10:02 ... at 1.9129. Up 44 pips ... a net gain of 46 pips ... and I was done for the day, thank you very much!!!

So glad I had enough confidence to bet multiple lots on that trade!

Which brings us to Thursday ... and four trades. Realizing there next significant news was scheduled for Friday (non-farm payroll data), I suspected trading would be range bound all day on Thursday. It was, although I had scare when GBP pushed to a new daily high at 10:00. Despite having suffered a loss of nerve on that stretching candle, I ended up 3 out of 4 trades and netted 18 pips on multiple lots.

So far this week ... up a net of 98 pips ... and no significant losses or mental strain on the journey.

Tomorrow could be dangerous ... and, I need to decide whether to play the betting game, or to stand aside since the NFP number can go either way!