There are many times that we are eventually right about the direction of the trade, but we are stop out early as we did not have the patience to wait for the better setup and trigger.
Some may suggest to use a bigger stop loss. If you have done your own evaluation and already picked the last swing high or low, then a bigger stop would not be helpful. I advocate that we are always wrong until the market proved us right.
Thus, hard work is required to learn to recognize the setups we want. Recognition is a skill and it requires time and effort to develop, or what we call experience. Be patience with yourself when you are learning, be patience with the market when the price is developing.
Tuesday, October 27, 2009
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2 comments:
Well said, Eric. Trading does require patience.
And this part on assuming we are wrong till the market proves us right helps ensure that we stay humble even as we chalk up successes along the way.
Thanks. This also helped me to notice when my confirmation after entering a trade did not come and if it happens more than once, then its a warning that what I am seeing may not be in sync with the market. Thus, I adjust accordingly.
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