That’s a [U]position-sizing[/U] problem, I think.
Probably you shouldn’t ever be in a position where one adverse trade can wipe out the whole day’s profit.
What proportion of your total account are you exposing to risk, with a trade that size, if there’s a sudden reversal that hits your stop-loss?
I don’t know, and I think it doesn’t matter much to the cause of the problem you’ve encountered. [B][U]All[/U][/B] price movements are caused by an imbalance between buying pressure and selling pressure, regardless of whether or not there’s an obvious, news-related cause for that imbalance.
Well, it depends what you mean by “gambling”.
The outcome of a specific, individual trade is never going to be predictable.
What matters is to be confident in the [B]collective[/B] outcomes of your next 300 trades, having already proven (typically through a combination of backtesting and forward-testing on a demo account) that you’re trading with a positive net expectation. Nobody should be trading with real money without first having done this.
Different people mean different things by “gambling”.
My own view is that every individual trade will always be - in a sense - a “gamble” and that that doesn’t matter as long as [B]collectively[/B] there’s an edge, and appropriate position-sizing is used so that a foreseeable “bad run” can’t cause much of an accident to the account balance.
Technical analysis and indicators are two different things.
That’s to say, “indicators” are a sub-set of technical analysis. (All of my own trading is TA-based but I don’t use indicators at all: I use the non-indicator parts of TA).
I suspect, really, that when you say you feel as if you’re gambling by trading from moving averages (and BB’s are based on moving averages anyway, of course), what you’re really saying is that you suspect that you [B][U]don’t[/U][/B] have a collective edge, with the trades you’re doing - perhaps because you haven’t first proven (by backtesting and demo forward-testing) that you have? Forgive me if I’m wrong about that, but if that’s correct, then I’d urge you to stop trading with real money, until you’re confident of that.
Beynd that, without analysing in detail your entry-methods, trade management parameters, position-sizing and a whole lot of other stuff, I’m afraid it really isn’t possible for anyone to tell you with certainty whether the method you’re using is sound or not.
