Sometimes No Signals are Good Signals

Today was the best example yet of when following my trading system to the decimal point pays off. Yesterday I plugged in all the relevant data to generate today's trading signal. And my system, somewhat to my frustration, didn't generate either a short or long signal. As I always do when I don't get a signal I considered ways of forcing one, which is how my urge to overtrade currently expresses itself. But I decided it would be foolish to end a profitable week by breaking my own trading rules just to get in one last trade.

That rule-breaking trade would have been a long one, since that's what forcing a signal would've given me (I've done this before, can you tell?) This morning when I checked in on the EUR/USD out of curiosity I saw the results of today's Non-Farm Payroll announcement: a decline of around 100 pips. If I'd placed my undisciplined trade I would've started the weekend on an extremely bad note, having broken my trading rules and paid a high price as a result.

What I find intriguing is that my system avoided trading today, not because I've coded it to avoid high-volatility news events like the NFP, but based entirely on technical price analysis. I can't point to any one equation that made this decision for me, but I have to wonder if there was a specific price movement that signalled a period of dangerous volatility on the horizon. This mysterious region where technical analysis intersects with real-world news is fascinating, because I feel technical indicators can sometimes identify a safe or hazardous news trade before it occurs.

Or maybe it's my imagination - what do you think?