Biggest Newbie Mistake-in my case

Greetings–my turn to give back to the Forum. I have done Forex for only a year and a half; I still consider myself a Rookie. Maybe not a Newbie, but certainly a Rookie. I have done rather poorly, until the last few months. The big change—[B]DON’T CHASE THE BRANCHES![/B]!!! By “branches” I mean the candlewicks. I would see the price take off in a big hurry, and I would scramble to get onboard. Then suddenly, with no visable reason, the price would turn around on me and go the other way. Next thing I knew I was down 15 pips, and my position, when viewed on a chart, was stuck way out on the tip end of a branch (wick). Unfortunately, this was about the absolute worst position I could have–the extreme end of a reverse—the wrong end!!! Obviously I then got out of the trade. More often then not, eventually the price turned [B]again[/B], and went my direction, even passing the “end of the branch” position I bailed out on.

[B]MORAL OF STORY:[/B] When price is screaming, don’t enter when the price is still way out on the branch—wait for it to pull back into the candle, then wait some more for it to resume the original direction (if it does). This dreaded pullback happens after almost every screamer—if it didn’t, there would be no such thing as branches (wicks). I also realize a huge branch on one timeframe may not show up at all on a different timeframe. Apply this strategy to the timeframe you use most.

Smart trading to all,

 Potaire