Happy Wednesday!

( A brief reprieve from analysis on our Euro Pound today… in light of some thoughts I had about how I think about and handle ”External” events in the Foreign Exchange Markets. )

Well…we have it!

The all out Media “feeding frenzy” over the “shocking and surprising” FOMC Rate Cut yesterday.

“Quantitative Easing” aside, the window of a “loose” benchmark of 0%-.25% really should not be a surprise in this case.

While it is historic in perspective…being the lowest level in U.S. history…is it truly a “shock”?

No….and here is why!

If you were observing the markets from a “Trader’s View”, it was simply another day at the office…albeit with a little more volatility.

The Dollar continues to weaken…a “shock” for you?

(click once for captures)

No. You have been working with this Price Action for days now.

Gold surges and has appreciated to an 8-week high around $860…a “shock” for you?

No. You are aware of the inverse Gold/Dollar relationship, and perhaps you have been using this to your benefit.

My perspective here is not about the decision to execute or not execute during Data Point Events….that is solely left up to your discretion.

My perspective is trying to not let the outcome completely override the logic and parameters that you had in the first place.

For example…if you are “flat”…do you simply jump in and arbitrarily place a position because of the “historic shocking anticipatory” outcome when the Decision was released?

Or…do you already have a position in place prior to the Decision, and then you immediately close it or add to the trade?

These examples illustrate these “extremes” in emotion and behavior that will become detrimental.

Perhaps not today…perhaps not tomorrow.

But in all certainty they will !

 I know I haven’t mentioned one in a few Posts…but what is today’s “Built-In” Lesson?

Try to never be surprised or over-confident about anything in your Trading World.

These “emotional extremes” can manifest themselves in a deep fashion that is usually detrimental to your decision-making process.

Before all of you send me to the “Land of the Margin Calls” or something sinister like that…hear me out!

I am NOT saying to IGNORE any and all information that comes your way…

I am simply saying to try to not let these EXTERNAL events effect you INTERNALLY  in a negative fashion.

Just as you can put the car in “Neutral” and ”coast” down the street…you can take a similar stance with your work concerning how you view macro-economic activity.

 ”Neutral” never really wears out like the rest of the gears in your car, now does it!