The next important question any trader has, after having an trading idea is: How are you going to play that idea? This question is especially true in the case of long-term traders as it's not enough to spot a trade setup you'll have to have a plan and how are you going to implement that plan as well.
Since beginning of the year I was calling this correction in yen pairs, and you can find plenty of evidence in my blog. But since I was coming flat into the new week I had to find somehow to re-position myself in accordance with my bearish xxx/jpy pairs.
But another important question is when do you know you're wrong? For that you should have a plan and a strategy that helps you read the market, before to know the answer to this question and give up of your idea
In Figure 1 you can see that I have been playing the short side several times before the market finally moved and give me a runner, which is the trade I was looking after. But before getting the runner you can see that on several other occasion I was stopped out either at a small loss or a small winner.
The reason why I've choose to play this kind of defense was because even thought we're moving to the downside and I was positioned in the direction of line of least resistance I still don't like to sell after a big sell off.
My second mistake was trailing my SL too close to the market movement and this was a mistake because of an psychological factor: FEAR. Because being so many time in and out you fear the market will do the same thing and will knock you out, and as you can see I have left lots of profits on the table.
Best Regards,
Daytrader21
Since beginning of the year I was calling this correction in yen pairs, and you can find plenty of evidence in my blog. But since I was coming flat into the new week I had to find somehow to re-position myself in accordance with my bearish xxx/jpy pairs.
But another important question is when do you know you're wrong? For that you should have a plan and a strategy that helps you read the market, before to know the answer to this question and give up of your idea
Figure 1. Top picture GBP/JPY, Bottom picture USD/JPY 1h chart.
In Figure 1 you can see that I have been playing the short side several times before the market finally moved and give me a runner, which is the trade I was looking after. But before getting the runner you can see that on several other occasion I was stopped out either at a small loss or a small winner.
The reason why I've choose to play this kind of defense was because even thought we're moving to the downside and I was positioned in the direction of line of least resistance I still don't like to sell after a big sell off.
My second mistake was trailing my SL too close to the market movement and this was a mistake because of an psychological factor: FEAR. Because being so many time in and out you fear the market will do the same thing and will knock you out, and as you can see I have left lots of profits on the table.
Best Regards,
Daytrader21
