GOOD THINGS COME... - Always amazing how markets work. If you would have asked me the other week what trades I saw out there, GBPNZD would have been nowhere on my radar. But just like that, the market found its way onto my monitor and a new opportunity was in the works. On Wednesday, I wrote about the severe overextension in this market and compared the price action to the side of a building. The market had gone completely parabolic and a reversal was pretty much as guaranteed as you could ask for in this business. And so, I sold on Wednesday just over 2.3000 and hours later was out with a nice profit of some 200 points. But the key takeaway here is a takeaway I have repeated many times. It is so critically important to stay on the sidelines and not force any trades when the market isn't giving you anything. Believe me. I know how hard it can be to stay sidelined.
THE IRONY - When you are on the sidelines for what might seem like an eternity, you start feeling as though you aren't seeing the market right and are missing out. The big irony here is that you probably are seeing the market perfectly well and know the sidelines is exactly where you should be. Listen to that voice and block out everything else. If you can do this, before long, the right opportunity will come knocking at your door and you will be able to give it the attention it deserves. The alternative is forcing a trade that isn't there and then having to worry about that mess, when the right opportunity comes along. This is far from ideal and generally ends in disaster.
A PROFIT IS A PROFIT - The other important point I want to get across today is not something I can't quantify and not necessarily something that might be the best piece of advice. But it is how I feel and a point I feel very strongly about. This GBPNZD short trade was amazing. It gave me follow through right away and ran very fast in the money. I certainly wasn't in a rush to get out, but at the same time, when the market gave me 200 points, I also was very happy to take the profit. Looking at the chart, I still see plenty of room for additional downside, and so, it could be argued that I exited the trade too early. I didn't let my profits run as much as I should have. While that could be true, it really doesn't make a difference to me. For me, this already was a big trade and I felt it was the right time to take the profit off the table.
This analysis is for informational and educational purposes only. This is not a recommendation to buy or sell anything. MarketPunks is not a financial advisor and this does not constitute investment advice. All of the information contained herein should be independently verified and confirmed. Please be aware of the risks involved with trading in currencies, stocks, commodities, cryptocurrencies and sports. Do not trade with money you cannot afford to lose. It is recommended that you consult a qualified financial advisor before making any investment decisions.
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