If you’ve been trading for a while, you’ll know how to be on the wrong side of the market. In fact, there is nothing more frustrating than seeing your trade approach a stop loss over time.
So what motivates you to place a trade that is the opposite of the move?
From my years of experience in currency trading, the main factor that attracts traders to finally place the wrong auctions is their inability to identify a trend.
Most traders claim to be able to identify a trend, but generally look at a low time frame trend. In fact, what really matters is the trend over time, such as hourly, daily or even weekly.
If the daily schedule is on a downward trend, consider it. One short candle on the daily table is equal to 24 candles on the hourly table and will turn into 96 candles on the 15-minute table. (Do you see the power of a higher time frame now?)
Therefore, if you are constantly facing harmful trades because you are trading on the wrong side of the market, you can now start looking for a long-term trend in a higher period and place trades in the direction of the trend.
One tip for identifying trends over any time period:
1) Set averages of 50, 100 and 200 styles
2) If they are nicely assembled in a certain direction with a good angle and separation, this is generally a good trend.
3) If they are mixed and straight, this is a sign of consolidation.
Try it on your schedule and see if it works.