Day 4: 25th Aug 2011

A day that brings to perspective what forex trading is all about. BRUTAL.

The losses in GBP that I carried from yesterday seem to be recovering from a lowish of 1.6350+ to 1.6390+... at that point I was down by USD80+ or so... I got greedy and hoped for better, worse, I got in another 0.3lots.

Then nightmare seem to unfold in many ways not really imaginable... It dropped back to the 16350 level and my losses then was a harrowing USD190+... I was contemplating cutting but it was way way too much to cut. It would mean wiping off my entire gains and part of my capital. I pondered... Keeping these positions stifled me from taking new positions that can help me recover my losses. As I pondered, luckily GBP recovered to about 1.6370.. at which I dumped my entire investment without second thoughts and reathelize a loss of about USD130+. On top of that, well, my inexperience shows. I inadvertantly close a position in USDCHF which was losing about USD12 at that point.. and it hurts.... bad.

After freeing my positions, GBP seem to recover back to the 1.6380... and I was like... DAMN! But moments later, the free fall came and GBP sank to 1.6250 levels and I was for once glad I cut those chains lose.

After removing my positions in GBP, I started taking short positions in EUR which was still high at 1.4430+ levels... I thought it might just drop just like the day before. Waited... waited... waited.. then it happened. I sold all the way down to 1.4400 levels and recovered some of my losses. Then when I thought it was safe to start accumulating EUR at 1.4380 level, it dropped like being weighed down by lead till 1.4320+ levels. At that level I was out of bullets to keep buying as it may weigh heavily on my margin should I continue to buy. So, my buying stops at 15pip interval down till 1.4356 and I was staring at complete whitewash should this one drop again like the GBP.

Fortunately, by 11pm or so, it has recovered some parity till 1.4370 level where I sold off some positions before hitting the sack.

Lessons learnt:

1. When you are trying to get out of a deep hole.... do not DIG any further.
2. When sentiments go down... it may continue to go down
3. Read more. Technical analysis goes a long way to help one to cut losses and to reposition for the next assault.
4. Despite all the bullshit.. I think luck and timing is the key.

Was not feeling well too today, was in bed for most of the day and I do not think I will trade much tomorrow either.