i am having this troublesome problem, i am getting trades wrong not because of getting a wrong trend, but cause i always cancel them on a reversal. I understand what i am getting but i feel i need some professional advice
Hi Sonny, Not proffessional advice I am afraid but over the years I have suffered with this problem. It can be caused by different things but here are a couple.
1, Markets are ranging not trending:- when markets trend the action can be choppy and can take out stops, you must decide the type of market before you trade and set the profit target accordingly.
2. Market entry point:- often you can enter a trend after the market has moved and end up entering just as a short term pullback happens. Developing a technique that avoids this can be done with technical indicators. Short term RSI and elliot wave theory will really help.
3. Trade set up;- setting the size of stops is really important, you must allow for some ‘noise’ in any trade. You do this by looking at the recent swing high/low and ensure you can cover it. But bear in mind the risk reward here, a stop loss risking a $100 is no good if you are only going to win $50 or if your equity is only $200.
i hope this helps
steve