When technicals don't matter...

Preclude:
EURGBP is showing a very nice volatility squeeze in 3hr timeframe. Hence a trade is setup to go long as well as short to take the breakout from the squeeze. This would be an OCO order.

The Trade:
EURGBP indeed broke out of the squeeze but unfortunately, its a false spike with increased volatility on the 30min timeframe. I took a 30pips loss on this trade as I felt I have identified the wrong pair to trade the 3hr (intraday) timeframe.

On Hindsight:
So with the technicals showing such a good entry, why was the trade unprofitable? If you looked at EURUSD and GBPUSD 3hr charts at the same time, you will naturally understand why EURGBP stayed locked. It was natural law for both EURUSD and GBPUSD to decline that EURGBP stayed locked. Obviously, the flavour for today was USD weakness. Choosing a pair without USD would subject you to greater volatility and losses.
This also goes to prove that trading intraday (3hr) timeframe, Market Themes take precedence over technicals.

Sin #1 of Trading

Preclude:
Today I committed the NUMBER ONE SIN in trading. Not only did I do it once, I did it twice and at the same time on 2 different pairs.
The Sin #1 of Trading:
Closing out the trade (whether profitable or not) before the candle is formed.


The Trade:
I was looking at profit taking in USD crosses with extended runs in the US Session last Friday, 8 May 09.
I identified USDCAD and AUDUSD for 3hr trades. Both pairs were rebounding off the channel S/R lines. They were also consolidating waiting for the move. I expected the move to be triggered when the London session opens sparking profit takings.
The trade went according to plan but due to my recent spate of losses; I committed the #1 Sin of trading by closing out the trade in the same candle my trade was triggered. Foolish and totally uncalled for.
20 pips win for AUDUSD (1/2 position as I was scaling in).
4 pips loss for USDCAD (Full position).


On Hindsight:
Once I closed out the trade. I knew straightaway I did something wrong. This reminded me of what my fengshui master said to me. He told me I wasn't someone who could do investment but rather a better consultant. He says my analysis of markets/information was excellent but somehow when I execute my investments, I am always hesistant and somehow do something to sabotage my gameplan. Something like indecisiveness. Tks Master Chen for enlightening me. Now I understand what you were talking about.

I told myself, Sihao, learn from this and make sure I always execute my game plan properly in future.

I punished myself by not re-entering the trade even though I know I could do so immediately. But at the same thing I don't want to break another rule and pay commission costs. I want this to be forever etched in my mind.