Keeping Your Cool

It was satisfying to make money in March, but it's still gratifying to start the new month with winning trade. This was harder and easier than it looked.

The Prediction

With a 75% probability, the 3am GBP Grid predicted the currency would travel another 45 pips on Wednesday, April 1st.


Dammit!

I see that the computer is telling me this is a good high probability trade. I'm very excited to start the month off with a strong probability trade. I see that the currency is surging nicely, likely to trip the sell within minutes of closing at 4am. This could be one of those in and out situations that we all love.

I noticed though that my charting software has frozen. I turn my attention back to my brokerage software, and it too has frozen. I'm screaming at the screen.

Back in Business

After a few moments of aggravation, I decide to reboot the machine. Reboot it again. Reboot it again. This time it catches and I'm back in business. Only now, the currency is 20 pips above my entry. I learned a long time ago, do not leave your wing man. Oops, wrong movie. Do not chase the currency.

My patience was rewarded when it retreated back to the SELL flirting with it for several minutes. I was able to get in at 5:32am. Yippie!

Knowing When to Leave the Party

Up down, up down. The GBP is clearly using the SELL as support all morning. My suspicion is that market might be waiting for the 8:15am ADP numbers. If they come in worse than expected, this currency could fly north. I'm resigning myself to waiting for the results of the announcement, when I notice the currency creeping up to my exit. A bird in hand is always better than two in the bush is an expression currency traders need to take to heart.

With 41 pips out of an expected 45 in hand, I dump the trade at 7:48, minutes before the opening of the American market. Gone good-bye.

Survey Says?

As you can see from the chart below, the GBP nosedives at the opening of the American trading hours.

A few minutes after that, the ADP numbers get announced. Instead of the predicted 650 thousand drop in employment rolls, ADP announces a staggering -750 thousand! Weirdly, the GBP dives in relation to the dollar. Now I'm thinking that I'm brilliant for getting out when I did, since I would've been clearly stopped out.

Bottom Line

I got lucky on Wednesday. If I'd left my trading desk in disgust after the computer glitches, I wouldn't have been around when it came back to the SELL. If I'd chased the currency north I would've only been up a few pips, forced to risk a big announcement to make or break me. If I hadn't been satisfied with 90% of the expected gain, I would've endured a loss on the day as it swooned seconds later.

Sometimes, you make your own luck.