4 Stupids Things and 1 Best Thing to Do

The first stupid thing you can do is to close a position early because you think it is going to go against you. Just because you have an edge over the market does not mean that price will immediately shoot up or down to your target. Price will move up and down and will even probably move against you before it moves in your favor. If you let FEAR of LOSS get you, you will lose money. If the market is going to take you out, let the market take you out by taking out your stop. That is why it is there. The odds are still in your favor.

The second stupid thing you can do is to close a position early because you don’t think (or you are AFRAID) that it won’t reach your target. If you don’t play the odds properly, you will not realize the full profit potential. That is a lot of effort for nothing. Even worse, if we make some mistakes along the way The system is designed for a 20 pip target, GO FOR IT.

The third stupid thing you can do is to get greedy. Just taking 5 or 10 pips can be considered GREED as well as FEAR since you are so afraid of loss that you get greedy for those 5 or 10 pips compared to the potential loss of 20-40 pips. Don’t let it get you, follow the rules and be happy with your 20 pips.

The fourth stupid thing you can do is move your stop, believing that the market will eventually go in your favor. This is the fastest way to lose money. We are DAY traders. Yes the market may go in your favor but it may move 300 pips the other direction before it does, if it does. This could take weeks or months and you have a limited account balance. If 5% of your account is tied up waiting this position out, guess what. You are missing 20 other opportunities to make money instead of just sitting there waiting, down a hundred pips while you miss the opportunity to make 20 trades for 20 pips each. Maybe you break even, when you could be up 400 pips. JUST DON’T DO IT.

The best thing to do is TURN YOUR COMPUTER OFF and go do something else once you place your trade, and place your stop and limit, . You are now in automatic mode, and the market will take you out, either for a profit or for a loss. This is the best way to eliminate the temptation to succumb to FEAR or GREED and do something stupid. If you are trading and following the rules of your system, and not making money, you need to take a look in the mirror. It is not the system that is the problem, it is you.

Your trade results will show if you are doing what is correct or you are doing what you like