Trading mechanics and perfectionism
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    Trading mechanics and perfectionism

    Today I want to talk about highly overvalued thing. It's accurate trading mechanics.

    Traders in general are looking how to improve their trading mechanics.

    What is that?

    It’s your exact entry and exit points, too often trader is looking at the chart and dreaming – wow, if I would have sold here and would have closed my position here, it would look very professional. Of course, dream of a struggling trader is to enter exactly at the extreme and exit at the opposite extreme.

    Traders spend a lot of time and energy to make their positions look that way.

    It leads to:

    - Catching tops and bottoms
    - Optimizing trading systems
    - Hunting for indicators and trading systems


    Should I mention that all those things are useless if not harmful? Of course, good trade location helps you to manage risk more accurately, but when it transforms into perfectionsim, it pushes trader to operate in a very narrow frame of mind and placing 3-4 pips stops or something like that.

    How to work on your trading mechanics to get more sense from this process?

    First, trader should recognize that it’s not necessary to get exact level of entry – it’s useful to think rather in terms of areas not levels. If you will look at any level of support or resistance, you will see that it’s often an area, not a level. By the way, it’s useful to apply line chart to see area of support and resistance more clearly. I prefer to say, «rejection» (not «support» or «resistance»), but most traders operate with that terms and I will use them too.

    Then, stop losses should be corresponded with volatility. Placing your stop «under previous low» is often counterproductive idea. Extremes are supposed to be areas of high liquidity, so it’s not wise to place your stops exactly near extremes. I would suggest at least to

    So, I would suggest to think in terms of areas (not levels), avoid catching tops and bottoms and let go any perfectionism in trading. Best traders are rarely perfectionists. Perfectionism is a whole psychological issue that deserves another post.

    Good luck!

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    There are lots of ways by which traders get movements of the market, it takes time to know the one that you will choose. In all you are doing, try to make good trading stop loss , this is very important. I believe that all trading style might work if traders can have trading stop loss and good disciplines while do the trade.

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    Quote Originally Posted by silverlady View Post
    There are lots of ways by which traders get movements of the market, it takes time to know the one that you will choose. In all you are doing, try to make good trading stop loss , this is very important. I believe that all trading style might work if traders can have trading stop loss and good disciplines while do the trade.
    What do you mean by good stop loss? Some traders set 200 pips stop losses with 10 pips profit, their equity curves grow very smoothly, but some day unexpected volatility comes to the market and equity goes straightly down.

    Low risk means not only small stop loss but also decent probability of the outcome of your trade

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    Quote Originally Posted by Value trader View Post
    What do you mean by good stop loss? Some traders set 200 pips stop losses with 10 pips profit, their equity curves grow very smoothly, but some day unexpected volatility comes to the market and equity goes straightly down.

    Low risk means not only small stop loss but also decent probability of the outcome of your trade
    In my opinion, a good stop loss is a stop loss which based on market condition. Small pips stop loss is not always good because sometime it market will hit our stop loss and reverse after that if we only using too small stop loss setting. It will be better if we put stop loss based on our condition however in order to put good stop loss then we will need to have an ability to read market direction too. If not then it will be same like ordinary stop loss.

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    Quote Originally Posted by Value trader View Post
    wow, if I would have sold here and would have closed my position here, it would look very professional.
    This is a common phenomenon of Forex traders. Forex chart looks easy to trade once it got painted with time. Then we start to think that, "ohh, I could sell from that fibonacci level. The price had moved so much and I had missed a lot!". But the truth is we were not confident about that trade when it was at fibonacci level, hence we hadn't opened it. But now as the market moved a lot, such thinking is arising. There is no use of it, it's totally rubbish. We should think of current situation always.

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    Quote Originally Posted by Value trader View Post
    Hunting for indicators and trading systems
    Indicator just only a way to predict the price move, but fundamental is the fuel how the price move. I think from now, I 'm not finding the indicator no more, because I realize that trading is about simple open position and money management. I'm using just fractal, trensline, and using naked simple chart to trading, but it was so effective

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    i remembered when i was hunting so many indicators for trading and hope to get the best one then would gave the best results, but at last just suffered with some loses, too much energy i spent for it, but i did not know how to use them with well or not suitable with them, all i had done because wanted to catch the tops and bottoms of chart for open position, and until one time, i realized all i have done was wrong, then i backed again to my basic with took the simple system for trading and i can enjoy it again

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    Quote Originally Posted by Value trader View Post

    First, trader should recognize that it’s not necessary to get exact level of entry – it’s useful to think rather in terms of areas not levels. If you will look at any level of support or resistance, you will see that it’s often an area, not a level. By the way, it’s useful to apply line chart to see area of support and resistance more clearly. I prefer to say, «rejection» (not «support» or «resistance»), but most traders operate with that terms and I will use them too.
    yes i guess that is the real plan with the startegics. to enter with the lower and exit for the upper with the price and the reverse. that the use with the technicals should left the good request with the requires of the spends to spare with the focus of the manage to work with the analytics to define the prefers with the chosen entry witht he options.

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    i usually spend my whole time and energy just to wait for perfect moment to enter the market. usually trade start from 00:00 until 03:00 (market hour) for first trade then take some rest or just analyze the market without focus too much on my trade. then, i start again when euro session open and new york session. sure this is the most challanging time to trade.

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    Quote Originally Posted by newentry View Post
    i remembered when i was hunting so many indicators for trading and hope to get the best one then would gave the best results, but at last just suffered with some loses, too much energy i spent for it, but i did not know how to use them with well or not suitable with them, all i had done because wanted to catch the tops and bottoms of chart for open position, and until one time, i realized all i have done was wrong, then i backed again to my basic with took the simple system for trading and i can enjoy it again
    If we are just finding, hunting the indicator, combine those indicator to make perfect prediction, you may get stuck and get wrong. Because your time, and energy do for nothing. Actually you may stuck with indicator or you can end with the consciousness that there are no perfect indicator, the only is naked chart is the best way to open position.

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