As a forex trader, one of the most frustrating feeling occur when you have planned your entry, stop loss and take profit and placed a limit order and price slowly approaching your entry point and suddenly it reverse and continue to march along in direction of your planned take profit and eventually hit it and you sit and wonder, if only my order was couple of pips below/above, it would have been a super trade. Sometimes, I think missing out on a trade hurts more than a losing trade.
While some traders look at this scenario and kick themselves, get frustrated and itchy and take a crap trade just because they could not keep their emotions in check, as they want to be part of market action. I use to think the opposite. If your limit order is missed by few pips more often than not, it means that your selection of entry level is almost spot on and that you have started thinking like the smart money and trading levels in direction of the smart money and that is a good sign and you don't have to change anything except for a little tweak in your entry criteria.
Let's say if your limit orders are missed by 10 pips average on majority of times, then all you have to do is split your order in two. For example if you are trading one standard lot, so you put 0.50 standard lot 10 pips below your actual level and 0.50 standard lot 10 pips above your actual level, so the net entry price of both orders combined would be your actual level. Ideally you would want price to hit both your levels, but even if hits only once order at least your are in with half risk of what your normally take, but you are not missing out on a move completely.
While some traders look at this scenario and kick themselves, get frustrated and itchy and take a crap trade just because they could not keep their emotions in check, as they want to be part of market action. I use to think the opposite. If your limit order is missed by few pips more often than not, it means that your selection of entry level is almost spot on and that you have started thinking like the smart money and trading levels in direction of the smart money and that is a good sign and you don't have to change anything except for a little tweak in your entry criteria.
Let's say if your limit orders are missed by 10 pips average on majority of times, then all you have to do is split your order in two. For example if you are trading one standard lot, so you put 0.50 standard lot 10 pips below your actual level and 0.50 standard lot 10 pips above your actual level, so the net entry price of both orders combined would be your actual level. Ideally you would want price to hit both your levels, but even if hits only once order at least your are in with half risk of what your normally take, but you are not missing out on a move completely.
The system works in the hands of traders who have the necessary aptitude, patience, nerve and stamina to implement it correctly. Hence those who fall in to this category rate the system as great; while those who get poor results blame the system for their own failings.
