The Authority’ on Price Action Trading. In 2016, Nial key forex tester 2 reviews the Million Dollar Trader Competition.
In today’s lesson, I am going to give you some examples of recent price action trade setups that provided the potential for a nice profit, and then I’ll explain to you how you could have secured that profit. I will also discuss some of the common mistakes that traders make in trying to take profit out of the market. A fact of Forex trading is that most traders take their profits as a result of an emotional impulse instead of exiting the market at a pre-determined target or from a pre-planned exit strategy. As a result, traders who exit a trade on emotion typically take much smaller profits than they would like, while traders who exit a trade based on logic and discipline typically are very happy with the profits they take. There is also an element of being realistic here that I need to touch on before going into the examples below.
You see, struggling traders who exit emotionally tend to think they are going to somehow squeeze every last pip out of a move and this causes them to have difficulty closing a trade that has moved into a nice profit. Look at the British pound vs. When we get up 1:2 times our risk in a trade it’s time to either lock in that profit, take it off the table, or at the very least analyze the market structure and ask yourself if you honestly believe the market will continue in your direction before making a significant correction against your position. How many times have you manually exited a trade only because it moved against you a little bit and then it rockets on in your favor? Or how many times have you manually exited a trade around breakeven only because you were afraid it would turn into a loss, only to see it turn around and take off in your favor while you were on the sidelines? You need to understand that you never know for sure what will happen next, you have to trust your trading edge and then let the market play itself out.