Knowing When to Say No

I feel great today. I made money when I should've lost money, but my fundamental concept is still valid, so I had the best of both worlds yesterday.

The 3am Grid Prediction

Coming in at 73 pips, the 3am Grid predicted a 71% probability of going 200 pips yesterday.

Boom, it tripped the BUY indicator. It was a bit of a bummer, because the 60 minute and the 15 minute indicators were well in the OVERBOUGHT area.

Hmmm, what to do? The 3am Grid promises good results but the facts on the ground aren't as promising. The 15 minute candles start to show indecision.

I got out of the trade. Up 34 pips for the day is never a bad thing.

Son-of-a-gun, the GBPUSD retraces 71 pips! Yippee, I guess. I made some money today, but on an intellectual basis, it bothered me that such a high probability trade would go south.

As the Stomach Churns

I haven't worked all the permutations of the 3am Grid. So what to do when the BUY was tripped, reversed, but the 240 minute and the daily both show it's gonna go north? As it happened, for 2 hours yesterday the GBPUSD flirted with the BUY trigger. Hitting, retracing. Hitting, retracing.

I stayed out. I made money yesterday. My rule of thumb is when I do, I stand pat. Finally though, the GBP definitively burst through. Unbelievably hitting the predicted LIMIT at 9pm EDT!!!

Bottom Line

I could not have managed this trade any better. Reading the indicators, I was able to bank some good money. Yes, it reversed and ultimately hit its predicted number. I wasn't there because the retracement was well in excess of my equity management rules.