How I just wasted a bunch of pips for no good reason

I thought I'd share a trading experience I had today that perfectly illustrates one of the bad habits I mentioned in my Stop Wasting Pips! post. Among other things, it proves just how easy it is to ignore your own advice and keep doing things that could shorten your trading career if you don't learn to keep them in check.

So here's what happened. It was around noon, and I was up over 600 pips for the week on various manual and automated trades on FX Engines. Now FX Engines places its trades through FXCM, which closes its trading day on Fridays at 4:00 pm EST, or 1:00 pm my time, in California. My plan was close out all my trades for the week, which I generally do on Friday, with plans to re-enter the market on Sunday evening. (Whether I even needed to do this is another story...so I'll save it for another post.)

Though it was an hour until the market closed, being me I just had to check in early. And I noticed that the EUR/USD price seemed to be drifting down a little bit...a few pips, then a few more. And so, inevitably, I started getting ideas. I thought maybe I should get out of the market a little early. You know, in case it lost another 10 pips, which would've been just terrible. So that's exactly what I did -- I bailed out of all my trades shortly after noon. And, to be fair, they were good trades, and I made quite a bit of money on them. However, when I came back and checked the price again just before 1:00, it had shot up 20 pips from where I'd exited. To be precise, the EUR/USD was at 1.2927, and I'd gotten out early at 1.2907. If I'd followed my system and gotten out just before the market closed, I'd have been 20 pips richer, which worked out to a lot more in dollars since I was trading multiple mini-lots.

Of course, there could be times when there is an advantage to getting out early. But since I have no evidence that it would be a consistent advantage, it doesn't qualify as a trading system or strategy. It qualifies as a bad habit, and one that erodes the disciplined, rule-based trading techniques that are essential to success in this market.

So, that's how easy it is to ignore your own trading rules, make a snap decision based on anxiety and a very short-term horizon, and end up wasting a pile of pips. I think it's time for me to go re-read my own advice. Maybe it'll sink in this time.