How to chicken-out from a perfect set-up?!

The following is a classic example of not following some simple rules in trading and how to miss a perfectly valid trade!
Last night XAGUSD graph showed a huge divergence in RSI giving away an excellent setup for a short trade following a major bonanza in gold purchasing. On top of everything, there was a significant gap in price in relation with 200 moving average price (yellow line on graph).
I’ve entered a short trade at 43.95 at opening of Asian session hoping that price may unfold downwards. Within first hour of trade price went down to 43.70 where I decided to move stop-loss at break-even (+2). I got kicked out of that trade pretty soon and decided to go to sleep without setting-up a new trade. I thought that new day session may be quite volatile and that my potential stop a little higher than previous day-high would be wiped-away with a reasonable amount of certainty.
Another think that may be a relaxing circumstance for me not stay in a trade is fact that not very often Asia session drives to a major turnaround - its market usually follow the previous (mad) flow or at least float in a "range" ... at least that were my thought, voices of "reasoning" of not to follow my indicators and very strong gut instinct on it!

I do not need to explain how that whole setup had unfolded – just look at the graph!
It doesn’t matter how many times one has to convince himself/herself to trust your trade – same mistakes may be repeated in no time. I am keeping this one in quite significant place with another one happened recently with drop in USD against Swiss Franc. That one had a perfect setup, almost immaculate execution at 0.71 (almost at a rock-bottom) but part of (short) trade remained in game wiping-out roughly 30% of my potential gain! But that’s another story....
Be well and trade safe,

Sasalex_fx

18.08.2011 - US$ trade plan

1) Short Swiss @ .800, stop @ 0.835. Divergence on 60 min RSI may signal that correction from recent US$ may be over. Risk-reward ratio is at least 1:5.

There is a similar scenario across other US$ crosses such are AUD, NZD, GBP... Will wait for a US trading session to see if risk is off.

Aug.17. Notes

AUDNZD August range is 330 pips. I will be a buyer at 1.25 and seller @ 1.265 with 2:1 risk ratio.

EURCHF:
After sharp Asian session correction swiss is floating at 200 day average line (EURCHF) at the beginning of euro-trading. After entering short at 1.1271 got stopped out at break-even. I am sitting on a sideline for now since there is not clear direction. Will see what US opening will make...Area of next "short" interest is 1.136.

Loonie:
Inability to break a triangle resistance line exposes 0.97 200 EMA line as potential support. RSI (240 min chart) is showing no divergence from parity point that leaves a risk open for another leg up to parity test.

RSI (60 min chart) provides a clue about recent move downwards from 1.00 where divergence was clearly shown:

Update (13:15 GMT): Entered long @ 0.9783 with stop 0.9743, target 0.995.
Update (14:43 GMT): Stopped at break-even

GBPUSD (13:15 GMT)
Entered short at 1.6512 spike - divergence on 60 min chart. Very tight stop just above day high:

Update (14:35 GMT): Stopped at break-even, next short attempt will be @ 1.6545 (if hit) from July high. After that there is no significant resistance point until 1.67 area that is May high...
Update (14:50 GMT): New short hit and already in -20 pip. Stop has to be above 1.66 given market conditions...
Update (16:45 GMT): Closed short just above BE, before it turned back to 1.6565! It looks that there are still too many people short cable (as David Rodriguez noted that on DailyFX last night)!
Update (17:20 GMT): Closed day with 8 trades, 4 over 5 pips in plus and 4 BE translating into +125 pips.

EURUSD triangle

Euro has to close above 1.45 on daily to resume bullish advance - otherwise 1.41 is target from a recent advance.

AUDNZD wedge on 240 min chart

Potential long @ 1.252...
Update: Some great ideas on AUDNZD scalping opportunities by MC "Scalp Master" Michael Boutros from DailyFX.

Swiss week

A story of this week is Swiss!!! Today's SNB intervention didn't do much to trigger a Swiss sell-off, just to temporary slow it down. Fortunately my trading was on a good side of the market netting total of 1230 pips on long Swiss trade (against USD and EUR). Only one position hat a target price (US) hitting 0.71 and that one was a major gainer. Unfortunately I have allowed others to go back some 300 each, some even generating loss last night during SNB announcement. But can't complain... ;)
I am still Swiss long with a small mix of currencies (EUR, USD, AUD and NZD) that I intend to leave to test yesterdays low with exception of Euro position where I am expecting to go to a close of parity price.
Other technical - I do not have any special opinion since it's not a good practice to stick just to technical in this messy market. I am rather going with a "fundamentals" until some major turnover doesn't change my opinion.
Best in trading,
sasalex_fx

Week of 01-05/08/11

AUDNZD has broken 1.25 line and next areas of interest are 1.22 and 1.20 where possible turnaround may happen. There would probably have to be some significant news from either side that may turn sentiment around and ‘till then – we are remaining in downtrend….
US$ front – not that many surprises… $ agony continues in dead race between Euro and greenbuck who will give-up first. It looks like 2-horse race that are at the end of their lives and running a last race ‘till first drops dead. My bet remains on Euro since there is too much of “green” garbage around to be easy to just drop it. Also throughout the last century, greenbuck showed some amazing resilience in tough times, always being able to return from dead – Euro hast to show that ability ;)
Swiss-Monster is still doing what it did the best in last 5 years and that is growing against pretty much against any currency out there! The only cure against Swiss is that Switzerland drops its currency entirely and adopts the Euro, a move that is not likely to happen in foreseeable future!
My trading in last 3 days: miserable overnight EURUSD scalping attempts (3x50pips down, 25 up), good gold scalps (2 positive, one negative, one BE), Swiss shorts (+350 pips in total, AUDNZD -150pips on long attempts and few other BE’s that leaves me in total of roughly +100pips…not bad since I’ve tried to do a few things that I usually do not attempt (overnight Asia trades in volatile markets – not very smart move!).
I can not see any set-up as of now worth mentioning since it looks like major market mover remains (bad) news. I will stay with scalps as opportunities come to me… ;)
Best of luck in trading,

Sasalex_fx

Update: EURCAD short setup 1.383-386 - graph is attached here.