“Not right now” and “No” are two different things.
I have recently been in two trades that have been shall we say, taking their time. I decided to short the NZD/USD based upon a pair monthly pinbars (shooting stars) that were formed from the months of October and November. I entered that trade in the early part of December. It is now going into the last week of January, and it is finally producing returns.
The other trade was the EUR/AUD pair, based upon major monthly support at the 1.55 handle. I have been in this trade twice, actually. The first trade was good for something like 120 pips, and the second I am still in from 1.5569. I had to wait for the second one to work out as well, albeit not nearly as long.
Several of the people on my public forum had been in both of those trades, only to be stopped out. This brings up two points in my mind that are teaching points: The length of time and the size of stops can both cause issues for the new trader. I personally believe that it is an issue of focus more than anything. Remember: What you focus on becomes your reality.
If you are focusing on the length of time your trade in under water, and not the price that it is trading at, you will talk yourself out of letting it run. If you placed a stop at a specific price, then until it gets broken through, the place that you decided that the trade was no longer working has not invalidated the trade. Remember, other trader’s stops and order placements are based on those areas, not those hours.
For the size of stops, that is a simple matter of focusing on the amount of pips, and not the true cost. If you have a specific risk tolerance, then it matters not if your stop is 50 pips or 500. If you are risking 1%, it is always going to be 1%, no matter how many pips it takes. Also, one should have larger targets on a monthly chart as well. If you have to risk 300 pips, then naturally your target should be at least that. It simply becomes a matter of percentage gain or loss, and not a concern of “300 pips”. These two scenarios are often the reason a new trader will get out of a trade early, “to save some pips during a loss”, only to see a trade go their way later.
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