My Bad Day with the Euro

Today's EUR/USD trade turned out pretty ugly - my system's technical analysis pointed to further declines in the Euro, but then some nasty economic news from the Philadelphia Fed sent the EUR/USD pair spiking dramatically upward, sending my short position into the toilet and way too close to my stop-loss for comfort. (If my trade's in the toilet that must put my stop-loss somewhere down in the sewer.) I guess this is what I get for predicting further declines in the Euro in my earlier post!

Right now I'm down 94 pips on this trade, and while I'm telling myself that these kinds of losses are statistically unavoidable, it still hurts. And it certainly doesn't help that I've been checking on this position every 15 minutes, exactly the sort of overanxious, system-sabotaging behavior that I've advised against in the past. (In an effort to make myself feel better, I just calculated how often a trade this bad occurs in my system. Answer: just under 6% of the time, or about once a month. So I better get used to it.)

If nothing else, a bad day like this is good practice in maintaining a disciplined trading strategy...and frankly it feels good to be able to look past this trade and focus on executing the next one as precisely as possible. For all the other unlucky Euro shorts out there, I feel your pain!

Related topics:
Limiting your emotional exposure to the markets
Sticking to your trading system