3 habits that prevent traders from making profit
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  1. #1
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    3 habits that prevent traders from making profit

    Hi traders!

    Successful trading is often not about unique trading system, it’s about doing certain things over and over again, or I would rather say – not doing them. Many beginner traders often do the same mistakes over and over again and if you would simply avoid what they do (or even do the opposite), you would get an edge on the market.

    I created my own TOP-3 list, you can add some more in commentaries to this post. I haven't uncluded money managent here, just chart patterns (market behavior) that traders fail to read properly.

    Selling «expensive» and buying «cheap»

    Most popular version of this principle is «buying bottoms» and «selling tops». When price suddenly breaks out from some range (say, to the upside) and starts to move rapidly, most traders will sell against this rally. That’s an instinct. If we’ve seen before small volatility and absence of significant price action to whatever side, we tend to deny breakout, we treat to new prices as «unfair» and rush to open a trade. Why in this case most traders are in hurry? They thing that current price action won’t long last and price will quickly drop back to the previous trading range.

    Look at yesterday’s example of NZDUSD:

    catchingtops.png

    It has rallied heavily, and believe me – there were many traders caught in short positions. Price has finally moved back to day opening, but I’m not sure that any short-sellers could benefit from that movement. You can’t enter short position (or long position, any position) if you don’t know your risk, if you are unable to calculate or estimate it. You can, of course, but it won’t be low risk trade, your risk will not be defined (don’t tell me that you know your risk because you have your stop-loss)

    So, in most cases shorting against such rally can be only reasonable when market is overbought and ready to liquidate to the downside. Such situations are pretty rare and this topic goes beyond our post.
    To avoid catching tops and bottoms, I recommend to switch between timeframes from time to time.
    What is cheap for one timeframe trader, may be expensive for other timeframe trader.


    Catching the «whipsaw»

    The second habit of beginner traders is to be aggressive after big price swings. Let’s say, we had news announcement and market reacted emotionally, We can see whipsaw with significant volatility.
    Most traders, who are bored with previous low volatility, think that market is going to move now more rapidly, more aggressively.
    But truth is that often market consolidates for 2-3 days after that, nothing happens, volatility goes down again. It’s very easy to be caught in such price action.

    settle.png


    «Trading near support» (resistance)

    Third habit is too much reliance on horizontal lines that are considered to be support or resistance. In fact, support and resistance are often areas, not lines. I mean, real support and resistance areas, not local levels where day traders put their positions.
    When support/resistance «line» is already visible for everyone, it no longer provides good opportunity. Many traders can see those lines, they can calculate risk and they will enter either to the short or to the long side (trading breakouts or reversals) placing their stops beyond this line. So, a lot of orders will be concentrated near those lines, and market will not have reason to leave this level – the more liquidity it has near certain level, the less reasons it has to go away from it. The most expectable scenario is «whipsaw» near such «levels».

    whipsaw.png

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    i was often trapped by this situation , trading near support resistance, and it made me spent much time to wait for several pips and also too risky because i did not know what steps will happen to me. so hard for me to see the true direction at this situation. then to handle unwanted situation, i just made pending order as hedging (no stop loss or cut loss )

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    Quote Originally Posted by newentry View Post
    i was often trapped by this situation , trading near support resistance, and it made me spent much time to wait for several pips and also too risky because i did not know what steps will happen to me. so hard for me to see the true direction at this situation. then to handle unwanted situation, i just made pending order as hedging (no stop loss or cut loss )
    Its very good for traders to know their faults in the market all the time, and b this, traders will be able to locate the solution on the other times they wanted to do that mistakes, I believe that you have learned your lesson, no one is above mistakes , but the ability to make correction counts the most in this business sir.

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    Quote Originally Posted by laiha7979 View Post
    my spouse and i seemed to be usually cornered by simply this case, exchanging next to assist resistance, also it created everyone put in enough time to have to wait for several pips as well as too dangerous since used to do certainly not know what actions could happen in my experience. consequently challenging to me to view the actual course only at that scenario. after that to address excess scenario, i recently created impending get seeing that hedging (no end reduction as well as slice reduction )
    you are right that every one is taking some risk according to his investment in the field but some time it can lead to a loss.
    It is the time to have patience and plan for recovery.not to become emotional and greedly at any situation because it is a cause of loss in most of cases.

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    Quote Originally Posted by newentry View Post
    i was often trapped by this situation , trading near support resistance, and it made me spent much time to wait for several pips and also too risky because i did not know what steps will happen to me. so hard for me to see the true direction at this situation. then to handle unwanted situation, i just made pending order as hedging (no stop loss or cut loss )
    for reducing my loss i also trading on support and resistance but could not consistence my profit or controlling my loss.now i am trading by opening pending order just above or bellow the resistance and support of the previous day and open trade for small profit target.by this way i am earning some pips.

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    i guess the basic of transaction is buy low and sell high. and we can make it profitable, but then we need to know how to get the low price and high price as entry point and also exit point, it is necessary for us to learn and practice for it, and also we do not know what will happen in the future, sometimes we analyze the market have the position for entry point ( sell or buy ) but then it still continue the position and make wider range and of course give us wider floating minus., then here is , we have to prepare trading with some options to overcome this position

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    Quote Originally Posted by newentry View Post
    i was often trapped by this situation , trading near support resistance, and it made me spent much time to wait for several pips and also too risky because i did not know what steps will happen to me. so hard for me to see the true direction at this situation. then to handle unwanted situation, i just made pending order as hedging (no stop loss or cut loss )
    I think that one of the worst habits that could be paid by rolling in the forex market and turning a profit without work in this market is that the rolling in the forex market trading without training or a good education and that does not have a successful trading strategy to help him succeed in this market

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    Quote Originally Posted by newentry View Post
    i was often trapped by this situation , trading near support resistance, and it made me spent much time to wait for several pips and also too risky because i did not know what steps will happen to me. so hard for me to see the true direction at this situation. then to handle unwanted situation, i just made pending order as hedging (no stop loss or cut loss )
    well dear newentry ! I think this is perfect decision for long term trader , I mean we can avoid stop loss when we apply hedging but two thing necessary for that (1) buy and sell on same price ( not difference more then 2/3 pips) (2) volume setting , as like 70/30 for both price. then it will be positive.

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    Don't loss you hope.

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    Avoiding stop loss and using hedging is not bad work. When any trader try to making trade in the Forex trading platform that time they are use this stop loss part. Because of safe their money from loss. But my little analysis i want to say that successful traders do not use stop loss. Also they always apply in their trade as take profit for their more experience.

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    Quote Originally Posted by newentry View Post
    i was often trapped by this situation , trading near support resistance, and it made me spent much time to wait for several pips and also too risky because i did not know what steps will happen to me. so hard for me to see the true direction at this situation. then to handle unwanted situation, i just made pending order as hedging (no stop loss or cut loss )
    Your situation , I also suffering at live trading graph. but, If daily chart base trade and strong support or resistance following by trade can be start trade then will be gain. yet, should 1000 pips playing power is needed to become professionally success in Forex. If we want to several pips then should different trading time frame. H4 or H1 trading time base trade will be success. Yet, always care to live trade.

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