What if the market moves against you? | Forex Factory

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What if the market moves against you?

  • #1
  • First Post: May 7, 2013 2:09am May 7, 2013 2:09am
What do you do when the market goes against your trade or positions?.Yeah I know lot people here try to answer it with the word stop loss.But that's not the question it is about your trading plan your next move after taking the loss,What do you do after taking the loss,Try to find another setup or relax for a while staying out of the market or any other contingency plan.How do you plan your risk management and money management after a loss,Please share your views
and ideas
  • #2
  • May 7, 2013 2:24am May 7, 2013 2:24am
Quoting Eagleprice
What do you do when the market goes against your trade or positions?.Yeah I know lot people here try to answer it with the word stop loss.But that's not the question it is about your trading plan your next move after taking the loss,What do you do after taking the loss,Try to find another setup or relax for a while staying out of the market or any other contingency plan.How do you plan your risk management and money management after a loss,Please share your views and ideas
depends on a lot of things..

Sometimes I'll get straight back in, sometimes leverage up, sometimes leverage down, sometimes take the night off... It's a confidence thing.

Sometimes the markets are clearly not playing ball, sometimes it was an error on my behalf (sl too close for example, or poor timing), sometimes I was simply wrong. If I take a series of losses I will definitely take a breather and find out wtf is going on.

It's a confidence thing. I have no contingency plan, I just do what I feel I need to do, experience is a good teacher.
Time hides Nothing
  • #3
  • May 7, 2013 3:11am May 7, 2013 3:11am
I "follow the plan", regardless of winning or losing positions.
So after I lose or win I continue waiting for another setup.

Itīs a routine and it takes patience and discipline.
Just ignore me. Thanks.
  • #4
  • May 8, 2013 6:58am May 8, 2013 6:58am
If it starts moving against me, I usually wait for indicators to confirm that the market is really reversing in another direction. Then you just have to wait for a better price to get out with minimal loss. On the other hand, if the market is "breathing" and the price needs to move up and down, but it doesn't break your indicators and the technicals still look in your direction - leave it as it is and wait for the profit target to be reached.

If the market triggers a stop loss there are three ways to act:

1. Start selling or buying again from the same level. Sometimes it works, as you could have been taken out with a false breakout or a spike. However, if the price keeps pushing the same way, it would be stupid to trade against the trend.

2. Place the opposite trade entry in the direction of the current price move, if you have enough indicators confirming that.

3. Do nothing and wait for other opportunities.
  • #5
  • May 8, 2013 7:22am May 8, 2013 7:22am
Do what FAVORITE does

http://www.forexfactory.com/showthre...18#post5412518

I'm not sure whether this method has ever been discussed here, on ForexFactory. I got this method from another forum, they call it "locking".

Let's say right now the price is 1.3260 and I got a "buy" signal. I bought 1.3260, set a take-profit, but didn't set any stop-loss. Instead of the stop-loss I created a pending sell-stop order at 1.3240 (20 pips).

Unfortunately price went against me. At 1.3240 my pending sell-stop order got activated, now it is just a usual sell order. At this moment I go to my original buy order (1.3260) and cancel its take-profit.

So now we have two orders (one buy and one sell) without any stop-losses and without any take-profits, which means that we "locked" this 20 pips' potential loss (that's why they call it "locking"). Whatever price does, it is still 20 pips and our equity is still 20 pips down. (I'm not taking in consideration the spreads because I want to make the big picture as clear as possible).

So now we have to "un-lock" this "lock".

It is possible that the movement against us was just a "spike" and after that the price went up again. It is also possible that the price keeps going down. We have to be very patient. We have to wait until we get the next very good and very clear signal to buy. Sometimes we have to wait for hours. Once I had to wait more than two days, but it is a very rare case.

When we get this signal we close our "sell" order. Now we have only our buy order and to recover our potential loss we need the price go up for only 20 pips. And if it goes up for more than 20 pips - then we even have some profit. But we have to be very careful at this time, first of all it must be a very clear signal, second, we have to create another hedging pending order for at least 15 pips (to be safe).

Al, as you can see, this method needs very good, reliable signals (otherwise you can lose 2-3 times more than your initial 20 pips if you do "unlocking" in the wrong time), but I believe your system provides very good and reliable signals, and we can always take a look: how far away from the middle line and from the upper line are we, for example, if we hope to go up (because with a good signal we would hit at least the middle), are we sure that we can recover at least 20 pips?
It takes a lot for me to IGNORE you, but you can try.
  • #6
  • May 8, 2013 7:37am May 8, 2013 7:37am
What if the market moves against me? ...... If there is no stop loss placed I usually hedge if the momentum is still there or I look at the Daily trend to find the bigger picture..
"I made money every time you place your Stop loss too close to ME"
  • #7
  • May 8, 2013 9:12am May 8, 2013 9:12am
Quoting Erebus
Do what FAVORITE does http://www.forexfactory.com/showthre...18#post5412518 I'm not sure whether this method has ever been discussed here, on ForexFactory. I got this method from another forum, they call it "locking". Let's say right now the price is 1.3260 and I got a "buy" signal. I bought 1.3260, set a take-profit, but didn't set any stop-loss. Instead of the stop-loss I created a pending sell-stop...
Does this really work? it seems like a self suicide to me what about spreads,swap!!!!!. It is nothing but double trouble
  • #8
  • May 8, 2013 10:26am May 8, 2013 10:26am
What if the market moves against you?

1) Check to see the reason why. If it's due to a market-moving news or operations such as Central Bank interventions, defaulting of their Sovereign debts by one of the EU members, unexpected economic numbers and etc., GET OUT!!!!

2) If the reason is due to some temporary hiccpups like the currency hitting a "psychological" or technical level, fake news like that Associated Press twitter hack, STAY IN THE POSITIONS!

Bottom Line: IF you don't feel the move against you is NOT justified with any concrete reasons, STAY IN, otherwise GET OUT!!
Make your losses in demo. Earn your profits live.
  • #9
  • May 8, 2013 10:38am May 8, 2013 10:38am
Quoting Erebus
Do what FAVORITE does http://www.forexfactory.com/showthre...18#post5412518 I'm not sure whether this method has ever been discussed here, on ForexFactory. I got this method from another forum, they call it "locking". Let's say right now the price is 1.3260 and I got a "buy" signal. I bought 1.3260, set a take-profit, but didn't set any stop-loss. Instead of the stop-loss I created a pending sell-stop order at 1.3240 (20 pips). Unfortunately price went against me. At 1.3240...
Hmmn... To me the TRUE "locking" of the losses would be to close the original trade when opening the trade to the opposite direction when the market is moving against you because otherwise as long as the original trade is still open, you are still continuing to sustain losses as long as the market is moving the other way.

Take the original "buy" order for example, when you have opened that "sell" order to follow the market's changing direction but leaving the original "buy" order open, that "buy" order is still continuing to generate losses as long as it's still staying open and the price is going south. To me, the only way to "lock in" that loss of 20 pips is to stop the bleeding from the 1st buy order and then opening a sell order to even out the 20-pip loss and hopefully generate some profit.

I stand to be corrected.
Make your losses in demo. Earn your profits live.
  • #10
  • May 8, 2013 12:57pm May 8, 2013 12:57pm
I usually quit for the day for that particular pair.
wo-yoy! wo-yoy! wo-yoy! wo-yoi! wo-yoy-yoy-yoy!
  • #11
  • May 8, 2013 5:05pm May 8, 2013 5:05pm
Quoting Erebus
Do what FAVORITE does http://www.forexfactory.com/showthre...18#post5412518 I'm not sure whether this method has ever been discussed here, on ForexFactory. I got this method from another forum, they call it "locking". Let's say right now the price is 1.3260 and I got a "buy" signal. I bought 1.3260, set a take-profit, but didn't set any stop-loss. Instead of the stop-loss I created a pending sell-stop order at 1.3240 (20 pips). Unfortunately price went against me. At 1.3240...
It has been discussed many many times and remains pointless. It is exactly the same as closing your original trade with a 20 pip loss and then re-entering with a new trade later.
It's a strategy that traders who are unable to accept a loss employ.
Please Do Not PM Me With Coding Enquiries
  • #12
  • May 9, 2013 2:59am May 9, 2013 2:59am
Quoting Gumrai
{quote} It has been discussed many many times and remains pointless. It is exactly the same as closing your original trade with a 20 pip loss and then re-entering with a new trade later. It's a strategy that traders who are unable to accept a loss employ.
Yeah I agree
  • #13
  • May 9, 2013 3:35am May 9, 2013 3:35am
Quoting Eagleprice
What do you do when the market goes against your trade or positions?
I don't panic.
Nothing worth having is easy.
  • #14
  • May 9, 2013 9:02am May 9, 2013 9:02am
Quoting Masterm1nd
What if the market moves against me? ...... If there is no stop loss placed I usually hedge if the momentum is still there or I look at the Daily trend to find the bigger picture..
As long as I know the hedging on the same pair is useless.People who don't accept the loss will hedge on the same pairs wasting time,money both
  • #15
  • May 9, 2013 1:36pm May 9, 2013 1:36pm
No, not right away unless it's too good to ignore, like the recent Cable retracements..
Usually, would want to review the chart, figure out what went wrong instead of jumping into another trade right away
  • #16
  • May 9, 2013 11:54pm May 9, 2013 11:54pm
Quoting Forexnuts
No, not right away unless it's too good to ignore, like the recent Cable retracements.. Usually, would want to review the chart, figure out what went wrong instead of jumping into another trade right away
Yeah as usually some people stick to hedging when trades goes against them using indies like stoch and rsi when it reaches overbought or oversold levels it may work some time but it is also waste of time and money,You pay double spreads,swaps, and most importantly you will not be able to take any positions unless and until you close it not a good idea
  • #17
  • May 10, 2013 12:13am May 10, 2013 12:13am
Quoting Erebus
Do what FAVORITE does http://www.forexfactory.com/showthre...18#post5412518 I'm not sure whether this method has ever been discussed here, on ForexFactory. I got this method from another forum, they call it "locking". Let's say right now the price is 1.3260 and I got a "buy" signal. I bought 1.3260, set a take-profit, but didn't set any stop-loss. Instead of the stop-loss I created a pending sell-stop...
The only thing you would be locking is swap gain for the broker. Just close the position. "Locking" (aka hedging) is just a mental crutch. The easiest way to keep it straight in your mind is to think in terms of net exposure.
  • #18
  • Last Post: May 24, 2013 12:08am May 24, 2013 12:08am
I will try to see if there is a chance to hedge my positions. In this way I can some how recover my loss. If market is against I will try to quit instantly to save my account from a big loss. market trend can change any time I do steps before to handle with every situation.
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