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In trading, as pretty much anything else in life, you should let go of the should’ves, could’ves and would’ves and live in the present. If it should’ve it would’ve. Trading success is as much about analyzing charts, keeping track of news and establishing a sensible strategy as it is about psychology.  Missing trades can hurt your ego and mess with your head just as much as (or sometime more than) losing trades.  Seeing a trade you thought of entering but didn’t, go in the direction you desired, will fill you with regret, have you thinking about how much money you would’ve made if you had just entered that trade and kicking yourself for not having done so and this can take a big toll on your future trading. So in the interest of avoiding missing trades, let’s see why traders miss trades so you can prevent it from happening to you:

Fear. You see a perfect trade, you analyze it, you test it against your strategy and right before you pull the trigger, you second guess yourself. You let the news and other opinions play games with your mind, you get fixated on the money and chicken out

Hesitation. You’ve validated your set-up, you know it is a good trade but at the last minute you second-guess yourself and decide to double check. The time it took you to verify what you already knew caused you to miss the perfect execution timing and now it’s too late.

Being haunted by past trades. It is called recency bias, where the outcome of a previously loosing trade can cause you to be paralyzed with fear and unable to move unto the next one.

Distractions. You may have been distracted by another trade or you dog wagged his tail or your sandwich is ready. The split second distraction took you away long enough to miss the perfect entry moment.

No more money. You have either fulfilled your trading quota for the day or have simply no balance.

So, as you can see, there are various reasons why a trader can miss out on a potentially profitable trade. Some reasons are perfectly valid, others, well not so much, but whatever the reason may be, in order to avoid making a habit out of missing trades, here are some tips:

  • Know that losses are as much a part of trading as winning
  • Know that the results of yesterday’s losses should have no influence over your decision on future trades
  • Stay away from revenge trades, one you miss out on a trade, document it and move on. Do not try to make up for it by jumping haphazardly onto a new trade that perhaps does not align with your strategy.
  • Keep a journal of your missing trades. If you know why you hesitated before, you may be able to avoid hesitation in the future.
  • Consider using price alerts and/or entry orders
  • Reevaluate your risk management strategy. If you feel nervous about a trade and it paralyzes you with fear, consider decreasing the size of your positions until you gain confidence.
  • Take a break. If you feel regret is taking over and you feel you might deviate from your strategy to make up for it, shut  down your trading platform for the rest of the day and come back when you have a fresh mind.
  • Get back to what you know: your proven trading strategy