Captain Jack wrote:lilac wrote:
Yeah, GBPJPY can be a killer if wrong, I am only observing it from now on, luckily it was only a small order that got trapped, but I refuse to give them my money so easily, if I know it will probably turn better in a few days.
Understand that I am not picking on you Lilac, but this statement sums up why the Fox is so successful at what he does and why he repeats the same patterns over and over. These are some of the basic human tendencies and habits that he makes his living from. This is why "trapping volume" works...people buy the Fox's story and place an order in the wrong direction. When price moves against them, they continue to hold the order instead of taking a small loss, because as you have said, price will turn soon. The losses increase, margin and equity fall, and capital that can be used on a "good trade" is locked in a bad position. On top of that, a lot of people will stack orders, in the wrong direction and end with a much larger loss than they would have had they closed it out early.
When I'm wrong, I take my loss as has been evident on several AUDNZD trade series I have posted recently. Those losses were taken and made up for with positive trades later., instead of allowed to roll into larger losing positions.
Take small losses and stack your winning trades. Do not do the reverse of this.
CJ
Yes, You are completely right. Unfortunately I took that GBPJPY sell last week, before I found this thread, If I had seen that W forming on D1 and H4, I would have been a diferent story.
I know I should not hold my losers, this one slipped without a SL and I went to sleep, I saw the big mistake the following day, and thought I should better wait for a retrace to close it. Of course, if I had closed erlier before the last push my loss would have been smaller.
I have been bitten by fox before, and once the mistake got so far, I learned sometimes it is more painful to close it right away than to hold it for a better later moment to close, like right now. I may close it today when I see it stops falling, so that I can minimize the loss.
Holding a loser is a complete waste of time and resources, and it draws my attention away from other good trade oportunities. I hope this trade is my last rotten apple in the basket, I put SL to all my trades since then.
Thanks for all the good advices. |
However we do have guidelines 
It's easy to get confusion when mixing different time frames and levels, predominantly I'm looking at the H4, H1 and M15. IMHO the AUDUSD has given us three levels down yes, but this was all within a day, so we have first level down on the weekly cycle (3 to 4 days of action), I use H1 for this. It was way over the ADR so I might expect some more accummulation/manipulation then a fake push up before heading down for Level 2. The complication here is that we are at strong support, and on the H4 previous level up however the previous low from last week has been reached resetting the count. CSS bias on the 4H is short but weakening. So overall a difficult one to predict.