LeapRate's Daily Forex Industry Newsletter
Join now to receive first access to our EXCLUSIVE reports and updates.
Screenshot of a breaking news alert e-mail from Q2 2017
The following guest post is courtesy of Adinah Brown, content manager at Leverate.
Do you have an idea for a guest post? Want your article to be viewed by the hundreds of thousands of viewers who regularly visit LeapRate and receive our daily email newsletter? Let us know at email@example.com.
Emotions play a big part in your trading. We often talk about setting up strategies to keep your emotions from taking over and triggering your trades, because when traders don’t take the precautionary measures to do so, it often costs them dearly. The cost of not being disciplined enough to keep your emotions in check is not limited by the amount of money lost from entering a trade based on pure gut feeling or excitement, or when letting losses run even after you’ve realized the pattern is going downhill, only because you have fallen in love with a position.
The cost of letting your emotions get the best of your trading should also be equated in terms of unrealized gains on positions that you didn’t take. Has it ever happened to you that you see a potential trade setup, but for one reason or another, you don’t get in on it and next thing you know, it has taken flight leaving you behind? Don’t feel bad. This happens even to the best of traders. Next time this happens to you stop crying over spilled milk, and look for your second-chance trade.
Hear me out now. As the famous Chinese proverb goes, the best time to plant a tree was 103 years ago, but the second best time is today, so let me tell you about my strategy for getting in on missed trades.
The first thing you should know is that as long as the dynamics of the chart remain, the signal is still very much tradeable, so don’t panic and look for your chance to enter. Instead of getting in late and chasing the market, wait for a pull back. If you are looking at a pin bar for example, wait for the price to bull back to a moving average or horizontal level of support or resistance, and jump in. In the case of a bullish pin bar signal, so long as the price is above the low point of the bar, you still have a chance to jump in whenever you see a retrace back towards the pin bar.
Another chance in which to get in on a missed trade is when the market finds a level and begins to bounce. Don’t panic when you miss that first bounce; the market will pull back, and when it does, get in.
Last but not least is the most obvious of second chances. You know those trends that just keep going and going like the Duracell bunny? Well, even those have pull-backs. As soon as you see the trend going back to short-term moving averages and begin bouncing, or when you see the chart breaking new highs or lows, watch it carefully, wait for the pull back to the moving averages or short term level and boom, jump in.
Now, next time you miss the perfect trade opportunity, don’t freak out, wipe away your tears and look for your second chance, because more often than not, you’ll get one.