Today we will try to find out what kind of thinking is correct during the opening, conclusion and closing of a deal.
Any operator faces these three stages, but not all of them know how to behave correctly, and therefore mistakes are made.
Before opening a deal…
Whenever you find an entry point that matches the rules of your trading strategy, you should think about the following important points:
* Determine the level to set the stop loss.
There is no need to set a smaller stop loss due to greed. You must have a stop loss strategy that is based on the highs or lows of the price, on the levels, because these values are really important and it will be much more difficult for the price to pass the level, this will protect your position and your stop loss from a premature closure.
* You must be able to accept losses.
Before each trade you need to remember that a trade may not be profitable as nothing is 100% on the market. Remember this every day. Remember that setups don’t always work, and then you won’t lose more by rearranging the stop loss or not putting it at all in the hope that the setup will definitely work.
* It takes time.
The deal does not reach the finish line in a minute. The market will move in different directions, and you should be able to not react to every move and give the deal time. Many people forget, but due to constant market monitoring and reactions to every move, traders make mistakes and lose money. You have to be able to wait, understand this. Let the deal work and don’t interfere.
Position is open!
The most interesting starts here!
And it is here that a lot of unnecessary mistakes are made.
* The market must prove you wrong.
After opening a position, the set stop loss will be the level at which it will be clear that you were wrong. You should leave the open position alone and let the price prove you right or give you the wrong opinion. Touching the take profit price will mean that you were right, there is no stop loss.
* Constant monitoring of the situation.
If you are still following every move, then most likely you will react to false price fluctuations and sooner or later close the position. You may get tired of seeing the price move and eventually make a mistake.
You can check your offer once or twice a day, but no more.
You must act according to your strategy, which gave the signal to open a position. Let the strategy work and do not interfere.
Closing a position
It does not matter whether the deal was profitable or not, it is important to rest after it, stop, put their thoughts in order.
It is difficult, after closing a position, to return to the market for a new setup, especially if the transaction was profitable. After all, they lead to excessive self-confidence, which leads you to open bad deals in large numbers.
After a losing trade, you always want to quickly get back into the market to recover. It’s a big mistake. Opening deals that are based on the desire to recover what was lost is a chasm within the chasm. Emotionally, you rush to open a deal, open bad signals and lose even more, and so on and so on. You have to understand that losing money in the market is normal, you don’t have to run to get it back. Learn to accept losses.
The only thing you need to do after closing any position is to be disciplined and stick to the trading strategy. The easiest way is to simply leave the market and walk away from the chart for a while.
It is very important to remember that you need to be able to save money. If you have earned something, withdraw a part at the end of the month, let it be the reward from him, which will give you self-confidence and make you a calmer trader in the long run.