The focus this week has been on the pairs that look ready to break lower against the dollar, and planning for the reaction to the ECB and BOE rate decisions and U.S. banking stress tests on Thursday afternoon. Professional currency traders will be planning their moves ahead of time, rather than just going with the flow each day TheLFB-Forex.com Trade Team said. On a day of historic proportions, in many ways, using and developing a trade plan to follow is critical.

No serious forex trader would go into Thursday unprepared, and a full understanding of all that Thursday brings would not elude a professional trade desk, and therefore should not get past any other trader. The Bank of England is looking to hold rates, and that has supported the pound over the last month of trade. The ECB are looking to either cut, or signal that cuts are coming, and that has created hesitancy in euro values recently. Whatever the outcome, the currency markets are likely going to be jolted into action as re-valuations take place in interest rate markets, in commodity markets, in equity trade, and in the value of the Usd. There are few times that one day has held so much anticipation in regard to forex trade. the Trade Team said.

As a professional trader the plan is set, the rules are engaged, and the market is allowed to make its moves. When personal money is at stake traders tend to get caught up in the mental anguish of the fear of loss. When trading a third party account that has a trade hit the target there is an acceptance that it is all a part of the plan, and there is contentment in the gain. When investing personal money the fear of loss of the potential gain if the trade is closed, and continues to move higher somehow seems to show itself as a loss.

The trade was planned, the target was set, and the target area is getting close; the Pro trader is happy to be getting green on the board, but some traders are not always happy with that. They tend to easily get into the 'just a penny more' mode, and that is very dangerous when currency pairs are going through a day like Thursday is destined to be.

Now, rather than just bank it, some start to look at what it could be, and forget that a bird in the hand is worth two in the bush. As the target hits the Take Profit order is removed as some start to ponder how much higher the trade could really go. There is an acute case of suffering the 'fear of potential loss, of a potential gain' syndrome. Common sense goes out of the window, target 1 is not banked, and instead the flimsy trade plan is adjusted, and a higher target set.

Some traders then sit and watch as pip by pip the pull-back happens, and dollar by dollar the already hard earned money slips away. But they are nothing but determined and suffering so much from the fear of 'potential gain loss' that they see nothing but where this is going once the pull-back has run its course. They will even put Jean Claude Trichet on mute in an effort to stop the market reaction to the press conference detail that is ruining their best laid, greedy, plan.

After going through the initial entry point, and after evaporating the previous gain, some now watch as their freshly moved stop loss is still hit, and suffer now the consequences, not the fear of,  the fear the 'potential gain loss'. They then suffer the indignity of now having banked a losing position that once was a healthy gain, and wouldn't you know that is the time that the partner sticks their head around the door and says Can I get you anything, luv?. The muted response is normally, Yes, you could get me another chance to bank some profit. 

Eliminate that horrible scenario; set a reasonable target and at that point bank 2/3 of the trade, pull the stop up to break-even, and then watch things unfold, safe in the knowledge that pips have been banked and a profitable trade that not only cannot now lose money, has the chance to get those 'potential gain' pips.

Another way is to sell it all at the initial target and then place a new order just above the next main resistance level, that way the retracement will not only be more enjoyable, but traders are much more likely to buy the pull-back once it finds a base, than they ever would be after having taken the stop loss hit; Once we get stopped out we get gun-shy, and that is not a good way to spend a Thursday. The Trade Team said.

Plan your Trade, and then actually follow your Plan. If you do not have a plan, share in ours. they said, because we are actually looking forward to the market coming to us on Thursday, are you?.