To Trade, or not to Trade

Good evening traders,

On Monday I placed an entry to long NZD/USD at about .7945 as the pair moved above the Ichimoku cloud in the 4 hour chart.

The above chart illustrates what I was looking for at the time. Price action was above the cloud, and NZD was showing strength against most pairs over the previous couple of days.

I had recently come off of a 184 pip winner on Aussie using a 50% retracement strategy to enter, and I placed my long NZD/USD entry based on a similar chart formation.

After failing to get tagged in at my entry, I pulled my order due event risk on the economic calendar.

 

As you can see, the FOMC meeting is placed above all other news on Wednesday, and for good reason.

The market unilaterally bought the USD dollar against most other assets and Indexes in the close of Wednesday's New York session.

I managed to sidestep a nearly instant 53 pip loss.

Here's the moral of my quick story. Don't be so focused on technical formations and patterns that you're not aware of events that can move the market. It's ok not to enter if the fundamentals, technical and news don't line up. If the story behind your trade changes, change your trade with the story.

Since the major event risk is past us, I'm looking to possibly short Cable against a 50% retracement of the FOMC drop, or 1.5550. Over the next couple of days I'll look for a manual entry, and bounce it off of next week's calendar.

Comments and questions are welcome. Follow the blog and check in regularly for updates. Let's start a conversation!

Thanks,
STT