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Remember that the market is always changing and that every moment in the market is unique. What works extremely well today may not work so well tomorrow. This is why in my Price Action Course I have 10 different strategies that I follow. Why 10? Well, these 10 are very effective and the also occur all the time.
It is important to understand that as the market changes and goes through cycles, some trading strategies will work better than others. It is important to not only identify this but to place your trades accordingly and be able to adapt to changing market conditions. This is the true difference between a mediocre trader and a successful trader. So just because breakout trades are occuring everyday for 2 weeks doesn't mean this will continue--and a successful trader is able to identify these cycles and adapt to them accordingly.
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Say I enter a trade that goes up 10 cents then down 10 cents then back up 10 cents. A lot of new traders would close out of this position at their entry price after this occurrence, or at unchanged. There is a lot of noise and manipulation that exists in the markets, and it is important to set a predefined stop loss and profit target and stick with them.
All too often when I was a new trader I would get nervous and think the trade was going to go against me and I would close out of the position prematurely with either a very small loss or a very small profit. I'm in trading to make money--not to make pennies on each trade. And after I would get out of the position 9 times out of 10 it would turn around and go in my favor, doing exactly what I thought it would do.
It is extremely important to follow your stop loss and profit target, and not close out of your trades before it is time to end the trade. This can be very difficult for some people to do, so if you need help with this concept drop by 123LearnToTrade.com and sign up for a free coaching consultation so we can talk over the issue.
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Have you ever had a day or week where you just feel like everything you do in the markets is wrong? No matter how strong of a level you find, no matter how picture perfect a trade looks, you get into the position and it just goes against you for seemingly no reason at all?
Well, it happens to just about all of us at least a few times--and the longer you have been trading the more times you have likely experienced this. Something we talk about in the Price Action Trading Course is that markets go through cycles and phases. What works extremely well today might not work so well tomorrow. But not to worry--these cycles repeat themselves over and over and over again. So just because something isn't working today doesn't mean it won't work again tomorrow.
That is not to say that you can just trust any trading method to guide you through the markets. You need time tested strategies that have shown they will work in the vast majority of market conditions, such as the ten strategies outlined in the price action trading course. Not each and every one of these strategies will show up everyday, however I can say that the vast majority of the time these strategies not only show up all over the market, but more importantly they work.
Now this also means that if you have a trading method other than ours that has been working for years and all of a sudden stopped working for a few days you don't need to panic--chances are the market is just going through a new cycle or phase and will get back to normal soon. The best thing to do during this time is use the sitting on your hands method of trading--that is not to place any trades at all.
So remember, when you sense a change in the market and things just don't feel right, go with your gut and sit on the sidelines for a bit until you see something develop within your methodology.
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