TV

Video: How To Avoid Bad Trades (Plus Weekly Results: 1 Entry, 1 Breakeven)

End of the Week Analysis of the high probability opportunities and Lesson of the Week – in Forex, Indices & Commodities

Click on the video to watch the full breakdown

As the markets have continued to deliver choppy price action this week, it has been one of the more testing weeks so far.

But, on the positive side, nothing is lost.

Here are the results for this week on our shortlisted charts:

  • EUR/USD – no entry
  • CAD/JPY – no entry
  • NAS100 – no entry
  • GBP/CHF – no entry
  • AUD/CAD – no entry
  • AUD/NZD – no entry
  • EUR/GBP – Breakeven

So what valuable lesson do we learn about ourselves from the markets this week?

Answer: that patience is not just a virtue; patience is also profitable. Reason for this is, by not taking trades that are outside our parameters, we’ve protected capital. Money has not been exposed to unfavourable conditions, therefore this non-trading is in fact, a form of risk management.

How do you practise this patience then?

By remembering two things:

(1) Only take the trades that are within your plan.

If you let the green circle represent the type of opportunity that’s in your plan, throughout the week, you are only to take those. You can see there’s not many and you need to pick them out, but by sticking to only those types of trades, you’re using your edge.

(2) Remember this quote by one of the most well-known trading psychology authors:

There is a random distribution between wins and losses
for any given set of variables that define an edge.

Mark Douglas

To put it in simple terms: you have no idea when a trade will be a winner, a loser, a breakeven… Or even how many days will go by without there even being a valid setups that meets the criteria of your edge/strategy. But overall, on a large timescale, it’ll work out. Don’t get caught up with today – see the much bigger picture.

In the 100 squares below, any one of them could be ANY outcome. Yet, over the course of the 100 results, the net result is likely positive if you have a good edge.

Onwards and upwards to the next week then!!

Written by: Dima Mihailovich, Technical Analyst for Forex Prop News

Contact and follow Dima on Twitter: @dimafpn

(Please note: All comments made in this video and article are not trading or investment advice and are for education purposes only. You are responsible for your own decisions and the risk that goes with it.)

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