A wise trader carefully plans his trades, and often makes an extra effort and “stalks” the perfect entry. Too often, when the time to enter the trade arrives, the tables turn and the opportunity isn’t there anymore.
Staying wise means moving away from the Trade button and waiting for another chance – not hitting it anyway.
You’ve probably heard the old cliche: “Plan your trade, and then trade your plan”, or a similar version. This is certainly sound advice. If you have enough time and patience, you may even want to “stalk” the markets and wait for the perfect opportunity.
This approach of “stalking” has a price though: sitting too many hours in front of the screen can make you a bit confused, seeing trades that aren’t there or missing obvious trades that fit perfectly to your plan.
Yet waiting for a few minutes for a candle to close will probably not wear you down. This is the case shown by Nathan Tucci here. He recorded a video explaining his potential trade, but the opportunity slipped away in the last moment. Tucci was a bit frustrated but stayed out. This is the wise thing to do.
Making money in forex also means knowing when NOT to enter a bad trade.
May traders will still insist that their trade is “close” to the situation they imagined, “almost” there or they feel confident and “trigger happy”. This could lead to losses and even the loss of trust in their system, even though they didn’t fully apply it.
Worse off, if this pulls out to be a successful, the trader can become overconfident, and this may lead to bigger losses down the road.
Remember that the forex market moves constantly, and opportunities will return soon enough.
Do you often encounter such cases when trading opportunities slip from your hands just before you’re about to enter a trade?
Further reading: 5 Most Predictable Currency Pairs – Q2 2012Get the 5 most predictable currency pairs