Sometimes news comes out that changes the trading landscape fundamentally and we get stopped out and there is no way we can predict the outcomes that we would like, otherwise trading would be easy and more people would be doing it.
I was in a EUR/USD short that I entered recently and I was in a healthy profit. All the fundamental news that I researched was accurate. However, the trade moved against my position, and I was stopped out.
European Commission
Why did this happen, well the European commission signalled that it prepared concessions for the United states of America to avoid the 25% tariffs imposed on it by President Donald Trump which should be announced next Wednesday.
While reports came in from Myfxbook that support a strong dollar. News like this can cause volatility within currency pairs
Was the Trade Correct
The main takeaway from this, is that my analysis of the trade was correct. News came out from talks between the French and American diplomats which would have an impact on the economies of both countries particularly Europe. We could not have foreseen this coming so it’s an unexpected event that caused us to lose a trade.
Experience Helps
So how do I handle this? I look at the evidence and I can see my analysis with the trade is correct and my stops were at the correct level as I am not gambling. The EUR/USD could still go down after the sharp pullback from the news. However I am not getting back into the trade as I don’t like revenge trading, trying to make the money back I have lost. Instead I will leave this trade for a while while the diplomats discuss and find solutions or agreements regarding the tariffs for the respective countries. I will then look to enter the FX pair after next Wednesday.
Conclusion
We can never time or control the market. As traders, we move to capitalize on opportunities when they arise, and sometimes they go against us too. It’s all part of the game, and maintaining discipline is key to long-term success.
If you have any questions or thoughts please leave a comment below.
