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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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It truly does take just one deep pocketed trader to make or break a pattern. What if we approached a critical price level and I accidently sold 10,000 shares at that level rather than bought 10,000 shares? I would drive price substantially lower and begin the chain reaction of taking out and activating stop losses.
It is important to remember that at any given time, a small amount of traders can influence or manipulate the market. This is a concept that we discuss more in depth within the Price Action Course, however in short it is important to learn how to look out for signs of market manipulation, through both price and volume. This is a more advanced topic, however for newer traders it is important to understand this fact. There will be trades that should have been profitable but because the market was manipulated you will end up in a losing position. Move on, learn from the experience, and prepare for the next trade.
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Think back to your first relationship--either in junior high, high school, or college. When that relationship ended, you probably thought the world was over. Looking back on it now, however, you realize it wasn't that big of a deal.
This is very similar to trading. Newer traders mope about and think about trades long after they are over. But professionals are used to taking tens of thousands of trades and when they have a trade go against them they forget about it and move on.
As a trader, it is extremely important to learn from your mistakes but not to overly analyze any one given trade. Last year I placed hundreds of trades, and no one specific trade stands out to me any more than any other. Whether I make $50,000 on a trade or I lose $10,000, it is important to accept the outcome of that trade and move on to prepare for the next trade.
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