Hey guys, I’m practicing in my demo account and yesterday happened something that I would like to understand with you.
Everything was going nice, all of my signals were good, my strategy was working perfectly so I decided to open a trade in the EURUSD (4H). I entered in the trade when the second candle, touching in the old support zone started/new resistance zone (In the circle that you can see in the image below)(Maybe I should have waited a little bit for the candle to develop a little bit more).
All good, I entered the trade and 10 minutes after, I see the candle growing exactly against my predictions (as you can see in the image the upper shadow is almost outside of the support zone that now, supposedly, would be a new resistance zone). The price was rising up and I was like “REALLY!?”
Basically, after maybe 15 minutes, I see the candle going all the way down again! As I predicted! I can tell you that I was going to school (I wasn’t home anymore so I couldn’t see If my stop loss was actually in the zone that the upper shadow hit) and I started right away, thinking of manipulation because I’ve been searching a lot about it these days. That was happening right in my face (I thought about manipulation but I’m not sure if it was that…).
Luckily, my stop loss was a little bit up (~12 pips) from the zone where the price went… so I didn’t get out of the trade and I made good profit.
With all of this, I would like to know, how do you guys deal with these situations? Because if you open a trade with, at least, 2%/3% of risk (if you have a small account) you get out of the trade easily with moments like this. Do I have to correct something about my entries or stop loss?
Yeah, there’s no problem, there are some questions. I was not risking only 2%/3%, I was risking more. If I was risking only 2/3%, my trade would be out in 10min…
What I was asking, is how do you guys deal with this. Because risking small sometimes give us small space for the trade to grow against our predicts and our position. I just wanted to know if there’s something that I can do or have in attention, to don’t be stopped in these moments (don’t get my trade ruined with this tricky situations).
I don’t like the idea of having larger risk - control your risk with position size not SL size
I would say you triggered trade too early. First candle is somewhat rejection but not perfect one - If I would be forced to trade it, I would put pending order below to ensure I am jumping in falling market.
It would not be triggered but next candle is beautiful pin bar - much better quality signal and again I would put pending order below and waiting for hit in downward move
stop loss value in pips may be different on trade size, 2% from 1000 usd is 20 usd, so for different lot size wil be: standard lot 2 pips, mini lot 20 pips, micro lot 200 pips nano lot 2000 pips. Also, higher time frames should have bigger sl, trying to use 30 pips could be bad choice. Regards Greg
Yes… In a normal situation, with time, I would probably wait a little bit more, just to make sure that the candle would develop to the side that I wanted. But for sure that the pending order can be a good solution! Thanks!
Stopping from trying to assume that you can improve on a setup beyond what you already have is a good place to start.
Constant tweaking will get you nowhere - believe me, I am the poster boy for the endless tweak.
So it’s not really a strategy/tactical issue that will help you.
You just have to accept the inherent uncertainty of any trade - most of us cant handle uncertainty which is why most of us fail at trading.
When you are seeing a set up or are triggered into one, the tendency is for us to believe or wish for the trade to go our way - stop that thinking right there - think to yourself anything can happen and I will likely lose this trade.
That is the only way you truly accept the risk in trading.
One point is worth mentioning though - if you are trading these small timeframes you are opening yourself up to this type of thing again and again and again.
As t@theequitytraders said in another post, Trader, Mentor and Blogger brokers and market makers are constantly running your stops.
So use a higher timeframe, and expect every trade to be a loser - that’s how I would handle this predicament.
From what I think, it is possible to control it by risk ratio. The trader has to use stop-loss by patiently entering from the swing point. The amount of loss is much less if the trade is taken from the retest.
Going to save this quote for the rest of my life! Makes a lot of sense! This is 100% true, I mean, we have to remember ourselves, everyday, that we don’t know what’s going to happen…We are always with the “uncertainty” that you talked about.
Thank you so much for your detailed reply! Helped a lot!
It may seem like the market is out to get you, or ‘manipulation’, but this is a typical pullback, just look at the wicks on some of the other candles. You had your SL just far enough away to avoid it. That’s the name of the game.
Luckily, I didn’t got out I mean, I say luckily because I wasn’t thinking about the possibility of the price to go up… Now I understand that, actually, we have to be prepared for everything when trading in the market.
Makes a lot of sense! This is 100% true, I mean, we have to remember ourselves, everyday, that we don’t know what’s going to happen…We are always with the “uncertainty” that you talked about.
I mean, I say luckily because I wasn’t thinking about the possibility of the price to go up… Now I understand that, actually, we have to be prepared for everything when trading in the market.