Market Bites Back...

This GBP/USD trade didn't work out. I followed my trading plan exactly and took the breakout low of the Asian session. Price moved lower initially and I was feeling pretty good that this trade would work out well. The market certainly had other ideas. I was fortunate to peel off 1/3 of my position at +8. Unfortunately, the other 2/3 of the position ran up to my stop for -21. This is the way it goes sometimes. You have to plan your trade and trade your plan. That's exactly what I did here. So even though the trade was a loss from a monetary point of view, it was a win from the point of view of sticking to your trade plan. Losses happen. They're a part of the business.

To be fair, there are some extenuating circumstances that may have contributed to the poor financial out come of the trade. First off, Trichet from the Euro Central Bank(ECB) gave testimony during the trade. He's the top dog where the euro is concerned. His testimony can sometimes make the market unstable as traders disect his comments regarding monetary policy. Secondly, a little later today, we have the Federal Open Market Committee(FOMC) rate decision for U.S. overnight interest rates. This is always a big deal. The interest rate outcome is pretty well known: it will stay the same, no change. The BIG deal is the accompanying statement and what it says about how the U.S. Fed(Bernanke and Co.) will administer monetary policy in the near future. Because of this unsurety, traders are unlikely to make large commitments in any direction in the market for any currency pair.