Today is 12-Jan-2012, just after the Frankfurt market open, I saw the trend is uptrend. Should I long or short EUR/USD?

The rule is following the trend, I buy the EUR/USD. The stop loss is to set 5 pips below the previous low, it was 1.27027. I was working, so I didn’t pay attention to it. Do you see any problem with this stop loss?

The following price action was a pull back to 1.26984. I was swiped out then the price went up again.

If you still didn’t see the problem, you need read the lessons on babypips… My stop loss was 2.7 pips above 1.27000. This price is an import psychology price. This is so apparent mistake to set the stop loss. I should set 5 pips below 1.27 not the previous low. A good lesson learned for psychology price.

Lucky, I bought EUR/USD again and made back the pips lost previously.