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Lesson Learned: Moving the Stop on $EURUSD
Remember that spike in $EURUSD back in early October? I had a short position open, stop safely above a pretty clear resistance. The market started grinding higher, and I remember thinking, "It's just a test, it'll reverse." Instead of letting the trade play out as planned, I moved my stop up just a few pips, trying to avoid getting taken out. Of course, it wicked right through my new stop, stopped me out, and then immediately reversed and went straight to my original target. Cost me a decent chunk of change and, more importantly, reinforced the mental discipline of sticking to the plan. That was a tough one to swallow.
4 comments · 1 points
That's a tough lesson many of us have learned the hard way. It's often said that a stop order is a part of your original trade plan for a reason; moving it rarely improves the outcome. Sticking to the initial analysis is usually the best approach.