There are two main enemies for every trader: letting a losing run go on expecting to recover (because we were obviously right at first) and trying to recover from a loss quickly. The lack of experience and consciousness about these factors can be critical to any aspiring or experienced trader.
For that matter, there are some things we can do to prevent ourselves to keep walking towards an abyss and turn around, which basically consists on continuously evaluating the road and looking around for anything weird.
By permanently monitoring how a trade is moving and your no deposit bonus 2016 we can keep track of its direction and detect any wrong turn, no matter how convinced we were of the road. When we are trading currencies there are many factors that can affect directly our price movements that we may not even know about. For this reason, the best thing we can do is just to monitor its performance.
Keeping emotions away and our thoughts sober is the best way to deter a bad trade almost instantly, allowing yourself to avoid an economic catastrophe. Indicators like a reversal candlestick can show you a trade is going wrong. Even a turn after a certain news that just came up. Any sign of weakness should be detected as soon as possible, this is as important as our winners. Even if you loose all of your no deposit bonus deal in 2016, keep it calm!
Right after we detect a bad trade going on its time to take action on it and exit as soon as possible. Exiting a bad trade not only will save us money, but it will save us the most valuable asset; time. Time we can invest in finding our next great trade.
The next big thing to keep in mind, know that we know how important it is to exit trades on time, is to have an exit strategy. The oldest and most efficient strategy is to set a stop loss price to the trade right before making it. A stop loss is the level in which we decide to sell a trade because that is not the way you were expecting, it’s basically “I won’t lose more than this”.
Defining your Exit Strategy
Whatever your strategy is, it is very important that you know what it is, how it works and execute without exceptions. Here are four types of factors that influence traders decisions daily
Time based Calls: Other type of traders just likes to watch a pair and how it develops for a specific time and for that time only. The time periods are determined by a previous analysis with tools for that and aim to accomplish a pretty specific objective.
Support and resistance levels: Some traders prefer to base their decisions on the Support and Resistance levels of a certain currency, when these are broken it is time for them to make a trade.
The Relative Strength Index (RSI): These are based on the two period RSI. They depend on if the trade is for a long or a short position. These traders look for pairs that are overbought or oversold in order to determine a trend; This allows them to exit on time if it took the wrong direction.
Trend-based Decisions: Other traders like to make their calls based on the trend that it is following; So, if it’s going up, they put the stop loss under the most recent swing low. If the trend is going down, they set their stop loss under the most recent swing high.
Remember to make your own rules and stick to them, knowing when to stop losing is definitely a big plus for a trader. Pick only best no deposit bonus 2016 and trade safely.