Trading is a competition between you and your opponent. Success will be with the one who is in control all the time. You can see this phenomena in everything in life.
When you enter into a trade, you need to make sure the trade is in control meaning either it is in profit or within the small loss limit. You can hold on to the trade as long as you are in control. the moment you lose the control to your opponent is when you should exit out of the competition so that your opponent can never take control on you. If you let the opponent to take control and your trade starts to go into loss and you start thinking that you will get control later then you are doomed. There are different stages within the life of a trade where you can lose the control.
1. After entering into the trade, and the price starts to go against you to your mental or hard stop loss, then you should exit and not let the opponent take control of you.
2. When a trade is in profit say 10 pips, and you let the price go against you, if you exit that trade in loss, then you already lost the control. You should have a boundary for this control in this situation where you can still exit the trade in minimal profit or loss.
3. When a trade is in big profit and you let the price go against you and when it goes beyond medium profit to small profit then you already lost the control.
The Trade Management should be built taking the above into account.
#1: You need to be in Control all the time. Trading is a competition between you and your opponent. Success will be with the one who is in control all the time. You can see this phenomena in everything in life. When you enter into a trade, you need to make sure the trade is in control meaning either it is in profit or within the small loss limit. You can hold on to the trade as long as you are in control. the moment you lose the control to your opponent is when you should exit out of the competition so that your opponent can never take control on...
Ignored
Err, no.
You can't control any of this, so essentially you need to "control" what you can, such as the money at risk (MM) and a (rough) plan about what trades you put on and why.
But no, it's not a 'battle' between you and "them". It's just trading...as simple as that. The market is a flow mechanism, which you're going to try to hitch a ride (short, medium or long-term) and hopefully take a profit on the differential. That's it.
Do NOT over think it and get "deep" into the "psychology" of trading, or any of that. That's what really confuses people and somehow makes it seem much more difficult than any of this needs to be.
A Trader's mental capacity to follow the rules are always tested every day by the market. He who can withstand that situation and still follow the rules can overcome the odds of becoming a successful trader.
1. Market will test to see if the trader is moving his Hard SL.
2. Market will test to see if the trader follows the money management and risk management.
3. Market will test to see if the Greed or Fear can takeover the trader.
A Trader when he is in a trade, is in the 'Zone' where he has to flawlessly execute his rules.
#3: Different Dimensions and the Trade Life Cycle.
In other dimensions, there is no end and no beginning. But in this Physical dimension, same like every other life, the trade too have a beginning and an end. A Seed sprouts with the right temperature, right moisture and right air. Similarly a trade has a beginning at the right time and at the right place with the right force. Same like how a seed sprouts and become a plant and then a tree, a trade can grow into a profitable one. there are many ways we can see if the sprouted seed, a growing plant or a grown tree is doing well or it is going to die. there are many ways we can see whether it is time to exit a trade. You can see a tree is going to die by looking at the leaves changing colors or drying or the branches drying, etc. Sometimes, the leaves may change color but just looking at that, we cannot decide that the tree is going to die because during autumn the leaves changes color and they drop but the tree is not dying so when you see a weakness in an ongoing trade, you need to make a decision according to the current situation. Sometimes the trade may still have potential to go further after showing a weakness and sometimes the trade need to be exited at a particular situation.
As CP says, it is not possible to predict the price movement but it is possible to follow price and make decisions by looking at what is happening now.
