Too conservative?

My question is can a trader be too conservative?

I have been trading in a demo for about a year now while building up some money that I can afford to lose (hopefully that won’t be the case).

I read and read and read as much as I can about the forex market. Been through the babypips school a few times. Read the forums. Read other forums. Google all kinds of info on indicators, why and how they work, and price action. I am really enjoying my adventure so far. I love researching information.

I trade off of the daily chart for three reasons: 1) I feel it fits my personality. 2) Time. 3) The charts just fit my eye better (kind of like certain holes in golf).

My main trading system is based on moving average cross overs and it has been working nicely so far. I stay away from trades I am not comfortable with (when in doubt stay out) or anything too close to what I consider major support or resistance.

My question is do most traders get in on the candle immediately following a cross? Looking back at my trades I seem to wait an extra full candle for a really good (for me) conformation of the trend.

Am I being too conservative? Am I missing out on a few extra pips? Are those pips even worth it? I am not greedy or anxious, I was just wondering.

I can’t complain about the results so far in my demo but, I am always trying to think of how I be more productive and efficent. I do not mind risk but it needs to be a risk worth taking.

Thanks to anyone who takes the time out of his or her busy day to answer.

I trade daily charts as well, I open the position close to the end of the crossing candle, which is 10pm (GMT) for me. I can lose a few pips but it also saves me many pips in case the signal was false and the trend reverses. Immediately opening positions used to be one of my biggest mistakes, lost a lot of money because of that :slight_smile:

To answer the initial question about whether traders can be too conservative, the answer is definitely yes. If you have a well tested out system that produces the types of results you desire and you don’t take the signals when they come, or you don’t trade a full size position when your system is telling you to do so, then you are almost assuredly not going to see the types of results you expect.

My question is do most traders get in on the candle immediately following a cross? Looking back at my trades I seem to wait an extra full candle for a really good (for me) conformation of the trend.

This may be a very expensive delay. The longer you wait for confirmation the wider your stop and more likely you have missed the move. But the real answer is to test different entry strategies to see if this can be improved

Many thanks to PipAddict, rhodytrader and tonymand. I appreciate the input.

I am going to try and be more intune with my system. Listen to what it is telling me.

It is a combo of what you guys said when I look back at my journal. I wait too long (poor entry, like what Pipaddict pointed out) and my stops get wider (tonymand). As my stops get wider I have to reduce my position size (rhodytrader) to stay within my limits for losses. Just for an example, maybe I would only take a half lot instead of a full to reduce pip value.

Thanks guys. I am definetly going to listen better and hopefully trade better as a result.:smiley:

With MA crossovers, the trend has already started, and your crossover IS the confirmation. Depending on what MA’s you are using, the actual start of the trend could have been 3-10 candles before the crossover, so like everyone is saying, the extra candle is not actually confirmation, it’s just more of the trend you are missing.

How do you deal with choppy markets if you don’t mind me asking? I could never figure that out

Hello, Akeakamai.

I have to trust what I have been doing and go in on the cross. Well, on the opening of the candle following the cross or near the end of the crossing candle.

Choppy markets have be tough for me also. I have been playing around with my cross overs on the four hour charts when they are ranging. But I think I could do the same thing watching the tops and bottoms of the range also.

But Seventh grade in babypips school: Important Chart Patterns has been a great help. I love the triangles. I have had a few really nice trades off of them. When things consolidate and get squeezed down it fits my eye well. I love drawing them also. Win or lose I find it to be very interesting. Of course I would rather win than not win. But I always learn something when I go back to study the trade and try to figure out what went right or wrong.

But I am not an expert be any stretch of the imagination when it comes to ranging choppy boring ugly markets. I believe they should trend one way or the other all of the time. Sure would make life easier.