Post NFP: Stopped out in GU & AU; now long GU, short UJ

12.33 gmt

Well, the NFP lottery went against my positions today. I closed out my short AU and short GU positions after the spike went past my mental stop.

Closed AUDUSD short at 0.8949, -32 pips.

Closed GBPUSD short at 1.5232, -77 pips.

Now added new trades as follows:

Long GBPUSD at 1.5218, SL 1.5178.

Short USDJPY at 99.43, SL at 99.73

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8 thoughts on “Post NFP: Stopped out in GU & AU; now long GU, short UJ

  1. Johannes

    NFP is a hell…. I am following most of your trades and doing my own trades. I am usually very afraid to trade on NFP fridays but i had four positions open since yesterday… and i did not close the opened ones at NFP and there was a moment i was losing almost 250 pips. Right now all NFP movement has retraced except for EU y GU…
    That’s why this week i told you that weeks like these should be taken as “vacation” ones….

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  2. Daniel

    Flipping a trade is not for the faint hearted. I could see how it can recover losses and turn loss into profit but the impact it has to my mental state if I got whipsawed twice on a row is too damaging. But I guess it’s different if you have a solid system which you trust. Well done for not flipping on Aussie!

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    1. ZenFXTrader

      Exactly right, Daniel. Flipping is hard. But look back on my system trades – the flipped trade almost always earns far more than the loss on the first trade. Usually when we have a losing trade we feel pain from the loss and don’t want to trade again until the pain goes away. Overcoming this feeling of pain is the mental discipline a trader needs to develop. I have only recently succeeded in the mental discipline required to be able to flip immediately after a loss. Machines don’t feel pain; they just do what they’re programmed to do. I’ve been training myself to trade more like a machine and am glad to say I’ve made some progress. Having a set of system rules that I can trust, that covers all possible outcomes, this helps a lot. If you’re getting whipsawed twice in a row, re-think your stop levels or your entry/exit rules. A whipsaw on consecutive bars has only happened to me twice in the past 2 years.

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    2. ZenFXTrader

      RE the Aussie, yeah, I’m using a bit of market knowledge added to my system rules in choosing which trades to take or not. The Aussie is just too weak. But probably not worth shorting at this level, at least not today. I also did not go long EU nor short EJ. EU is in a strange mode, very tightly held between 1.32 – 1.33. I have a feeling (from the charts šŸ˜‰ ) that it can’t go up much more, wants to drop, and when it does the drop will be very large. EJ will be pulled in opposite directions by UJ and EU, so it’s not an interesting pair to trade in this situation.

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      1. Daniel

        Yeah, but NFP / other big events risk whipsaw happens quite often so I’m not sure how lucrative this strategy is.

        I think the reason there is no whipsaw today was because market is expecting strong NFP, so when it disappoints, it only goes to one direction. But if we have a strong NFP (but not extremely strong)we may see buy rumour and sell fact price action which makes a certain position vulnerable to whipsaw. I think it’s brave and could be profitable and but not for me.

        One thing that I think you can improve is on your policy towards risk event. Sometimes you avoid it by closing your trades before the event, sometimes you stay in. I think you should have a system in place so you never doubt what you should do.

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      2. ZenFXTrader

        If one has a good entry, one can withstand the whipsaw around major events. My system rules, if strictly followed, do okay in most major event risk since the entry is usually much before and usually has a buffer already by the event time. I don’t always follow the rules strictly due to a) practical issues like not being free at the time of the event (family life or chores gets in the way), or sleep, or sometimes I just feel it’s not worth the risk. One fundamental rule of trading I follow is not to be in the market if I am uncomfortable, for whatever reason.
        If you trade at the hourly or lower time-frame, you will get whipsawed much more. You should have an entry/exit rule that is not triggered so often.
        I am leaving these two trades open this weekend (that’s another situation where I use my discretion, no firm rule for it). After giant candles like this there is sure to be more follow through early next week.

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  3. Daniel

    Hi zen, I agree with you on the importance of good entry, but normally it’s difficult to get good entry. Anyway, I am just making the suggestion to you on big event risk because I notice you made two mistakes this week (in hindsight of course). You close your trades while you should stay earlier this week (with your short AU, GU, and long UJ) and you stay in when you should close today. I know you use your feeling and other practical reasons, but if you can have a more solid rule whether to stay or not, I think you can improve your result even more.

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    1. ZenFXTrader

      Thanks Daniel, I will think more deeply about how better I can deal with event risk. It is difficult, if not impossible, to get every trade profitable :-). I am aiming for consistent good profits, not for perfection. The results for this month are over 200%, even with the mistakes, so I’m happy.

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