Hey,
After a few years apart I decide to re visit my path with forex and update my case studies. Now I am a student of Steve Mauro, Martin Cole. Lance Beggs and Al Brooks. Only using 10 EMA and support and resistance and candlestick and price action. Today I shall post this week trade that I had lost. Both of which are stupid and senseless.
[B]Case Study #1 – Why You Should Let Price Come To You[/B]
[B]What Went Wrong #1[/B]
I had this trade yesterday night 19 of December 2012 going bullish after seeing somewhat 60/40 inverted hammer. Didn’t have the time to monitor as it is almost 2am Singapore time.
[B]Lesson #1 -[/B] If you can’t monitor don’t open trade.
In this case, I didn’t let price come to me. I went in despite the fact that it was late and I assume price would reverse. Looking at the amount of stop hunts the market makers have done.
At last after I woke up on the 20 of December 2012. I found out that I didn’t set any stoploss and price ate 4% of my trading capital. Ouch!
[B]What Should You Had Done[/B]
If worst case, you decide to hold on as price always shows more volatility then needed. The image below shows where you should had gotten out.
Well I guess this is part of parcel of trading, but to have sustain loss more then I should, cannot be forgiven.
Like what you read? I have more of this, case study - rely prejudice from higher timeframe and not be swayed by noise.
Hi, David
Interesting post. Please can you tell me what are your reasons for trade entry and how do you calculate stop and tp?
Thanks
Mytrader
I’m no expert but to me it looks like you bought slap bang in the middle of a range, which goes against range principles of buy low sell high and left you no room to make a reasonable RRR.
Looks to me like you need to go over your books! On the other hand just shows you that even the best traders make mistakes. I have been studying for a long time, on my own, and I have learned a lot, but still wet behind the ears. Even now when I look at Forex charts, which is my primary learning tool at the moment, I find even after all I have learned it is hard determining which way a trade will go. I don’t see 100% perfection. I believe the key is in money management and risk reward ratios. Even the best Traders will tell you this. Stop losses are a must!