I have been thinking about all the trades I have missed. Partly my concern can be put down to selective memory — the trades that I pass up that would have made a loss do not stick in my mind. It is missed opportunities that upset me. I have therefore decided that I have to write down a reason not to trade any breakout signal that the computer identifies. This will both block me into a corner when there is no good reason not to trade, and make me less concerned when I don’t trade if the trade would have been profitable but I have a good reason for not trading.


AUD/JPY: Breakout is not from a range.
10-yr Treasury: Breakout was on low volume and the yield is just above 3% which could be a barrier.
Cocoa: 200-day moving average is in the way of the profit target.
EUR/CHF: Already short EUR, vs. GBP.
Corn: There are plenty of reasons to trade: selling is in control, demand seems to be contracting, price is at a new all-time low. On the other hand breakouts have not worked as a way of shorting corn for some time and the USDA Acreage report is due tomorrow and it is dangerous to trade ahead of it. Because breakouts have not worked I would like a more convincing breakout — higher volume and bigger range — and no potential reversal risk from an upcoming report.