Saturday, September 23, 2017

How To Know If You Are In a Good Trade

April 20, 2011 by  
Filed under Forex FAQ & Latest Post

In today forex faq, we will be going through a question that I think most of you are having in mind and we have a fellow trader who ask it on behalf of those of you who are still new to trading.

Below is the question:

After making a trade how long after will I know if the trade is good or not? meaning trading 1h time frame but after 5hours (meaning 5 candlesticks right?) i’m losing by 10 pips?

In fact, there is no way you can know if the trade is good or not until it stopped you out. I do not believe in the period of trade as a way to know whether the trade is going well. Something the price may just move in range for sometime before it goes in your direction or against you. Therefore using a specific number of candles is not a good way to gauge the performance of your trade.

If you have read my blog post, you will have know that I emphasize the importance of setting a stop loss and a target profit for every trade that I made. For me, I simply switch off the computer after I enter my trade and let it run either to my stop loss or my target profit.

That is why you must have a trading strategy that is tested by yourself in the demo account. With a strategy that you have confidence in, you will be able to walk away from your computer after you have placed your trade. I know of some traders who will sit in front of the computer looking at the chart and to me trading is just another 9 to 5 job.

The whole thing about trading for a living is to be able to do whatever thing that you love and have the freedom to do it. Being glued to your computer isn’t the right choice.

Speak Your Mind

Tell us what you're thinking...
and oh, if you want a pic to show with your comment, go get a gravatar!