The Joy of a Winning Trade... Until It Isn’t

Meet Alex, a passionate trader who has spent hours analyzing the market, drawing lines, marking liquidity pools, and waiting for the perfect setup. Today, everything seemed to be going his way.

After executing a well-planned trade on GBP/USD, the market immediately started moving in his favor. Pips stacked up like a well-cooked plate of profits. His MetaTrader terminal showed glorious green numbers. The dream was real.

Feeling like a market wizard, he grabbed his phone and texted his trading buddy:

“Bro, I just caught a perfect move! Easy money! 🚀”

He even entertained the thought of quitting his job—if every day was like this, why work when the market could pay him for pressing a few buttons?

But just as he was about to open YouTube and search for "Best Cars Under $100k," the market decided it had other plans.

Retracement.

At first, it was just a small pullback. No big deal. He had read about this in trading books—markets breathe, right? A normal retracement before continuing up.

Then the pullback got deeper. And deeper.

Before he could react, his once-glorious profit had evaporated. The green numbers turned to a dull shade of break-even.

And then... red.

His emotions went from “I'm a trading god” to “Why do I even trade?” in a matter of minutes.

The Correlation Trap: When You Think You're Smart But the Market Disagrees

While Alex was watching his GBP/USD trade make a U-turn, he noticed something interesting—EUR/USD was lagging behind.

"Aha!" he thought, "correlation!"

Since GBP/USD was retracing, surely, EUR/USD was about to move in the same direction as GBP/USD originally planned.

Without a second thought, he jumped into a EUR/USD trade, expecting it to follow GBP/USD. He didn't check the EUR/USD chart. He didn’t analyze liquidity or structure. He simply assumed that since GBP/USD was reversing, EUR/USD must follow suit.

Big mistake.

Instead of moving as expected, EUR/USD went the opposite way—straight into drawdown. Meanwhile, GBP/USD suddenly resumed its original move... just as he had planned.

Now, he was stuck in a losing EUR/USD trade while GBP/USD was flying without him.

A painful realization hit him:

“Just because two pairs are correlated doesn’t mean they move in sync every second!”

Correlation is not as simple as “If GBP/USD goes up, EUR/USD must go up too.” Sometimes one pair retraces while the other moves forward. Sometimes the dollar index is doing something weird in the background. And sometimes... the market just enjoys making traders suffer.

The Lesson: Trade What You See, Not What You Assume

Alex's story is a classic example of overconfidence and poor correlation analysis. Here’s what he learned the hard way:

A winning trade is not a guaranteed win until you close it. Secure profits when possible.
Don’t assume correlation without proper analysis. Always check both charts before entering.
Markets love to play mind games. Stay disciplined, or the market will humble you.

At the end of the day, trading is a psychological battle. The market is not your friend, but if you respect it, follow your plan, and avoid emotional decisions, you might just survive the rollercoaster ride.

Now tell me—have you ever been betrayed by correlation?

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The Rollercoaster of Trading: When Profits Turn to Tears and Correlation Betrays You