In this video, I outline my thought process in trying to pick a bottom in the trend move lower in the EURUSD.
The video was recorded in the far east session. However, because of the production and processing time, the trade I proposed in the video was actually stopped out before getting the chance to post to YouTube or to ForexLive.com.
Although at the time I thought it was time lost (on top of the money i lost on the trade), the bones of the analysis are worth sharing.
Often we as traders may have all the right reasons to think the price may do something. We get caught up in the upside rewards but forget the risks.
In the video I spend most of the time outlining the reasons for the trade and those reasons define and limit my risk. Knowing where I am wrong is more important than the reward – especially when trading a counter trend.
So although my account shows a small losing trade, I am glad the risk was a small amount. In fact if did not define and limit my risk, I would have lost a lot more on the trade as the trend did continue much lower.
I hope you learn from my loss.
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I created this video with the YouTube Video Editor (http://www.youtube.com/editor)