Here are 2 suggestions for dealing with
the scary situation where the market throws
a punch and you take a loss:
the scary situation where the market throws
a punch and you take a loss:
- The Hunter: Fearlessly set pending orders (like traps)
where your original trade was, and be ready. There is a
good chance that the market move which took out your
trade will end up being short-lived. Scary is a market
that races 125 pips against you. Hilarious is the market
that races 225 pips back again! You laugh at the spooks
when you're ready and waiting. When it fails to progress,
that squirrely market comes racing back to your planned
trade setup. - The Fighter: You take it in stride. Close your trade with a
loss. The market got a punch in because it did not do what
you expected. When you feel nothing, like the fighter, you
immediately look for a new target that this impulse in price
action is aiming for. Do you see it? Then change your plan
as fast as the market does. Open a trade in the opposite direction,
and close when you get to the new target, or when you have at
least half your loss recovered. Change did not scare you,
you rolled with the punches.
- Jennifer Thornburg
My Threads: Trading is as simple as 1-2-3, Highest Open / Lowest Open Trade
2