Jonson Smith, Forex Signals Service Provider at Forex Signals Answered Nov 25, 2016 Author has 132 answers and 72.2k answer views The daily chart of the EUR/USD is correcting after a spike and channel bull trend.
Have you ever had a feeling that some greater power in the market has singled you out and is doing everything in their power to make your trading life a misery. Because it seems every time you enter a Forex trade, almost immediately you find the market reversing on you? The market is probably just ‘rigged’, or it must be your broker stop hunting you right? Did you ever consider you might be chasing price around the chart, consistently entering the market at bad prices. In this article we are going to take a look at why ‘chasing’ price around the charts is impractical, ineffective and why it will unravel you mentally. The feeling that you might ‘miss the train’ Have you ever been sitting in front of your trading desk, watching the candlesticks tick higher and lower and then noticed a significant price event unfolding in front of your eyes?
This event could be price breaking through an important support or resistance level, or maybe a trend line. Whatever the situation, the price action makes your eyes light up like a Christmas tree. You whip out the trade order window as fast as you can. You proceed to enter a Forex trade at the ‘market price’ with a high level of urgency. You’re in the trade, fuelled up on adrenaline, and on the edge of your seat watching the market go crazy as price breaks through the key point on the chart. You’re thinking to yourself, ‘oh this is going to be a massive breakout and land me the big trade I’ve been waiting for’.
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Then all of a sudden the movement reverses and now you’re on the wrong side of the market. Stop chasing your own tail An event like this could leave the un-educated trader banging their head on the keyboard, repeating ‘what went wrong?’ I know the feeling, but the market doesn’t work the way as everything else does in your everyday life. It operates in a more counterintuitive way, what you think might be the right way to do something is often the wrong way. You believe you enter a forex trade with military precision when really you’re as sloppy as a 2 year old with a crayon. The markets are full of deception, emotions, traps and psychological torture that will absolutely rip you apart mentally if you’re mind isn’t ready for trading.
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Trying to trade the market uneducated, or unconditioned is like trying to navigate your way through a land mine field, blindfolded. If a commercial airliner crashed without warning, investigators would act quickly taping off this accident scene to do some crime scene investigation. So let’s quarantine this type of aggressive trading and get a bit more of an understanding of why so many people churn and burn. When you enter a Forex trade by chasing price, there is an obvious lack of planning in the trade execution. Throwing orders at the market on the back of impulsive price movements might seem like the right thing to do in the heat of the moment. Best forex robot.