Ten Questions to Ask Yourself During Losing Streaks in Trading
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Are you trading in the wrong direction of the trend in your time frame? Money is made in going with the flow the vast majority of the time.
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Are you buying break outs in range bound markets or trying to swing a trend? Look for higher highs and higher lows or lower highs and lower lows, this is a trend. Also break outs of all time highs and all time lows is another signal that a trend could take place. Some markets and stocks are just inside a range, knowing the difference can make all the difference in your results.
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Are your stops to tight? You must give trades enough room to fluctuate only exit when it goes to the place that you believe proves you are wrong.
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Are you trading so big that one loss takes back weeks or even months of profits? Keep losses smaller than wins, risks are too big if being wrong once robs you of your past hard work to build up your account.
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Are you trading in an environment that you should just be avoiding? There are markets so volatile and choppy with gaps and reversals that just will not fit your method. Knowing when not to trade is one trait of a winning trader. It can save you a lot of money and emotional capital.
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Is it time to stop trading your opinions and start trading price action? If you are trying to predict and be right more than try to understand what is actually happening then it is time to trade price action and stop trading your beliefs.
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Is it time to be more picky about your entries?
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Is it time to learn how to exit with a trailing stop or target to avoid giving back your profits?
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Is it time to go back and modify your trading plan or method to account for a change in the market behavior?
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Is it time to slow down your trading and think more and trade less?