EURUSD Trade Review (16 May 2012)

If you had been following my EURUSD forecast, I had been very excited about counting the “completion” of my five waves.  Alas, my trade was botched.  Here’s a chart of my wave counts and my entry (Green Line) and stop (Red Line).

Here’s my personal review of the trade:

1. Was I diligent in monitoring the price movement? - Y
2. Did I have alternate wave counts – N
3. Did I follow my trading rules? – Y
4. Did I follow my money management rules for individual trades? – Y
5. Did I follow my guideline on max number of concurrent trades ? – Y (I had EURUSD, USDCHF, AUDUSD running at the same time)

I need to be more diligent in having alternate wave counts.  Where else can I improve?

1. Always go back to higher timeframe to look at overall wave movement.  Especially when I dig down into so many degrees / levels.
2. One thing I’ve been thinking of including in my trading plan that I have not.  Similar to what Robert Balan proposes – If the stop is hit, enter a trade in the reverse direction (not more than the size of the initial trade).
   
   In his words - “The purpose of the net short position is to try to recover all or enough of the losses from the long trade so as to prevent the capital from being impaired.  A bigger stake on the downside is unjustified at this point. “
   I’m not so comfortable with entering into a trade automatically in the opposite direction as this point, but will look at how this will limit the loss incurred from the trade.

Alright, that pretty much sums up my trades.  It’s back to the drawing board, I’ll post my next forecast when it’s ready!