Without a doubt some traders will have made some pretty decent gains last week whilst others would have been scratching their heads asking why they didn’t take any action.
I was speaking to a trader at the end of the week who said he felt a real sense of pain in missing out on what he said could have been ‘The trade of a decade’. He had seen the events of last Friday and couldn’t get over the fact that he had ‘missed out’. If only he had shorted cable like he thought he should have!
This fear of missing out is really part of the dna of a greed based trader. Greed based traders enjoy embracing risk and if they miss out on opportunities, they look at how much money they could have potentially made and then become frustrated because they missed out.
The problem at this stage is that frustration at missing out on a good opportunity can lead to a type of revenge trading. The emotion of missing out on that opportunity eats away at them and so they are desperately looking for another big opportunity. The problem is, are they starting to push too hard to find that opportunity? Ultimately, they’re at risk of over trading in the struggle to make up for the missed trade.
The way to suppress this emotion is to accept that you can’t possibly catch every big winner and that the market will always present other opportunities for you in the future. If you genuinely did have some intention to take that big trade you missed out on, congratulate yourself for having the correct analysis. Carry on with analysis like that and without a doubt, other opportunities will come your way…
Moving over to the currencies, the AUD/USD pair looks interesting on the weekly chart right now. Despite speculation that commodity currencies are going to struggle, the Ozzie is holding up rather well over this past week. It has the potential to make a run for that upper trend channel line on my chart so if more strength comes in, look for a run to that trend line….
Charlie Burton
Ezeetrader
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Have a great week
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