THE EXTRA MILE - A possible trade will find its way onto my radar and then I will monitor the price action to see if it goes that extra mile to give me the desired entry I'm looking for. Over the past few days, USDJPY and AUDNZD were on my radar, but hadn't been able to give that extra push to get me into the market. This followed a period for the entire month of February in which things were coming onto the radar but never making it. But late Wednesday, I finally got that go ahead with AUDNZD. I understand it may have been frustrating to wait out that next position, but waiting is something I have learned to appreciate and something that has been a major asset to my trading. I believe in my methodology and will continue to sit back until the market extends itself and gives me that extra mile. Remember, there is victory in sitting back and many times, no trade is the best trade. But alas, we can celebrate. A trade is finally on the books in February.
DYNAMIC - Breaking down my actual strategy, it's important to understand that it's all dynamic and a level that might look good as a tradable level on one day, won't be the same level on the next. As the market moves, the levels change and I recalibrate in an effort to digest the most recent price action, while using it as a way to pinpoint an optimal level on that given day. Using AUDNZD as an example, I had been revising my entry lower in recent days, as the market continued to show signs of additional weakness. On Wednesday, we dipped down into the 1.0600s and the trade was finally there, sitting into what I believe to be formidable longer-term internal support. Remember - this trade is medium to longer term in nature and is unleveraged. I have the stop way down below a critical area right now and want to be able to sit back and let it breath without stress. And with all that said, the max total risk for a trade that has rewarded us time and again, is a very modest 4%. I will be looking for the market to soon turn back up and accelerate towards a retest of that 2017 high from October around 1.1300.
ALMOST AND THERE - Looking back at the waiting game that has been February, the key takeaway is that exercising patience in trading translates into major progress in the pursuit of mastering the art of discipline. And it's those trades you love (like this AUDNZD one) that are almost there but not quite there, that can get you into the very worst kind of trouble. Why? Well, when you're looking at something that you love, that isn't quite there, you run the risk of being forced to exit for a loss at a level you had to adjust for, to compensate for your earlier entry. And so, if that level is threatened, you are tempted to disregard that discipline and keep hanging on because you love it so much. Sometimes, this might work out. But over time, it will eventually get you (usually quickly) and kill you. We had taken AUDNZD for a nice ride in January, from the 1.0880 area up towards 1.1050 before stepping aside. And even though I loved it when it dipped back down to the 1.0880 area again, it wasn't there. I waited it out and that patience is now giving me another great shot, 200 points below that last entry from January. I'm not sure how it will work out, but it feels great to have resisted the temptation to jump in prematurely and I have been rewarded for it in the process, whatever happens from here.