Quote from austrijec:
hi fxjake, like your style.
you have large stop... on the other side you get out usually on a small retracement. How do you decide to give trade room all the way to stop or to get out early?
my method:
I like using my emotions that I learned to observe, to play opposite direction to what they are screaming for, with very small stop and it works great. Except, it feels like work.
This is a great question, Austrijec.
The details are key to profitability, as I see it.
It's funny, I think that entries really aren't that critical, but the exits sure are.... and I am not alone in that thinking.
A great example of this is the recent trade I took on the 4hr NZDUSD chart (attached).
[I know I didn't post this one on this forum, I forgot.....it happened rather quickly.]
I thought that price would bounce off of the "major" s/r zone (black line) and approach the minor s/r zone (purple shaded area), but the question remained, would price then retreat back down, or would it go higher?
At this point the trade was a "free trade" and a few pips were locked in, but I had made the decision that it looked like the minor support/resistance area (purple) would not hold, and that price would come down and knock me out at breakeven, so I exited.
Will you always get it right?
Nope.
But I have found that psychologically, it is easier to have two targets - an easy-to-achieve target that is close, one of the nearest minor support/resistance zones and a more aggressive target. Once the first target is met the remaining lots will me moved to breakeven (or + a few pips) and then I see if I can get more out of these.
Sometimes when it is clear that a reversal is coming - it is ok to just jump out straight away.
I have been thinking about this a lot and I think that there are ways to "develop" your intuition. Cognitive psychologists would call this "expertise" - but it is sort of the same thing, as I see it.
I have a lot of other thoughts on this, but I think I will use them to write an article on this issue, thanks for the inspiration austrijec.
