Ok so I have been studying, I have been looking at charts and I thought I had a good system going for entering trades. Sunday evening before the new week began I looked at pairs which I thought had the potential for a trade on Monday. I live in the Euro zone and had decided that the GBPJPY was in a great position for a buy if it came up to where I had put my support level. So when it crossed the line, on the 4 hour chart , where I wanted it to be I took my trade. GRrrrrreat I hear you all say. Well yes it was untill I saw it going up and trigger happy me decided to put in a break even. Good money management I hear you say. Yeah!!! Until it very quickly did a reversal and stopped out of the trade. PPLLLLEEEEHHHHH. So then I did not Happily watch while the pair recovered and proceeded to climb in the original direction of my trade and eventually make around 130 pips. OMgoodness me.
Moral of this story is Believe in your analysis. Don’t put in stop loss too early. Let the trade run unless indications are it will go very fast in the wrong direction.
[QUOTE=“Caledonia;757237”]Moral of this story is Believe in your analysis. Don’t put in stop loss too early. Let the trade run unless indications are it will go very fast in the wrong direction. I hope this is helpful to any newbie traders[/QUOTE]
100% disagree! Don’t put your stop-loss in too early - that’s terrible advice. Hell, your stop should be in place when you actually open the trade.
Without your stop, you don’t know what position size to trade & it you know all this information, then it should be in place.
Your problem is that you moved it too soon. Regardless, you should always have a stop in place at all times & even with all your analysis & a well placed stop, you will still have many trades that trip out your position & then go in the direction you initially predicted.
This has happened to me too, a few times at least, and it’s always very frustrating. I firmly believe that stop loss should be placed the moment you open a trade, but you should also take into consideration the possibility of a retracement in your analysis and put the stop loss below or above said retracement. Give yourself some leeway if possible.
Let me rephrase that What I meant to say is ’ Don’t move your stop too early’ I was so busy trying to lock in profit that I didn’t give the trade room to move. Lesson learned I hope
[QUOTE=“Caledonia;757843”]Let me rephrase that What I meant to say is ’ Don’t move your stop too early’ I was so busy trying to lock in profit that I didn’t give the trade room to move. Lesson learned I hope[/QUOTE]
Now that I can 100% agree with. Trades need both room to breathe & time to develop.
I totally agree with you.Another important thing to learn is forex trading psychology.You should properly deal with all your losses, of course you can’t expect to gain at all times.
This is absolutely true - and maybe even more emphasis can be placed on the [I][U]time [/U][/I]development. Very often a price move will trigger a trade entry, which then continues a certain distance and then returns back to the level it started from before launching off properly into the anticipated direction.
This can sometimes even be used to confirm the validity of a trade by waiting for this pullback before entering. If, after this main second leg starts, it again pulls back to the same level then it is probably best to be out of it.
Can confirm. Sticking to your strategy is absolutely essential. It even matters more than whether you win or lose in short term - if you don’t use your plan/analysis yous should not have created it in the first place.
This is the problem I face constantly. I am trying to learn to trade by simply looking at price action. Looking at support and resistance. Points where there might be a break out or a pull back to continue a pattern (channel etc) I need to learn to wait for the right moment as I’m very often right but always go in too early. One thing I have learned you need the patience of a saint in this game :21:
Going to give you 1 tip, on your entry early thing. The Ol Might Wick. Its kinda like a predictor indicator its self. Not necessarily an entry signal, but a preparational spot to look for an entry. Its pretty universal across all pairs, and shows the tug of war between buyers and sellers at that price. Again, Im not saying its the grail, Im just saying, its a good indicator for the fight of balance, which price hates.
I have the opposite problem. I don’t have much trouble finding good entry points, since I use candlestick analysis and that can be very helpful in that regard, but I always struggle to figure out when I should close a position, I am either too late or too early. Candlestick analysis does help with that too, but I am either too patient or not patient enough and I miss the moment to close. It can be really frustrating.
I was having the same problem.I believe before you enter into a position,you need to know when you are going to exit the market,Knowing the time frame of how long you want to hold onto your open position will determine your exit points and prices.Also your exits should be driven by support and resistance ranges and profit targets.
I generally agree, but I also think that is not always possible, since market conditions can change very quickly for any given reason. While having a trading plan is absolutely necessary, one should also be able to think quickly on their feet and adapt to sudden changes.
