Some do that. However many don’t dare to open an order. They continue to watch the price going in one direction point by point. They mentally calculate how much they would earn if they decided to enter the market earlier. Regret their indecision.
And it seems like the chart should’ve already reversed but the price continues to grow stubbornly. Your heart is beating furiously, you gather all your will and finally enter the game, without delay!
Sounds Familiar?
Most traders experience similar situations. This happens to those who still allow emotions to influence their financial decisions.
What is wrong with this situation? Due to a lack of confidence, the trader doesn’t open a trade until the last moment and afterward enters it out of greed. Unfortunately, in most cases, they do it too late. The price manages to reach high or low and reverses. As a result, the trader suffers losses.
And the worst part of this situation is that the trader often doesn’t close the position, even when the price continues to move in the opposite direction. He believes to the last that the market is about to reverse again.
Invalid Ways to Enter the Trade
When someone opens a trade in such a way, that is, too late and solely on emotions, it is called “clicking the button”.
But this is not the only wrong way. A trader may also enter too soon. When the price is just starting to move in any direction, the trader often opens a trade without receiving a single confirmation. As a result, the price makes another reverse and the market participant inevitably loses funds.
How to Enter the Trade Properly
There is only one sure way - you need to follow the trading plan. You must choose a strategy that includes a detailed description of all the conditions for opening a trade. All these conditions must be included in your plan. To simplify the process, you can create a checklist and open trade only if all up to one item on this list is confirmed.
Here are some tips for avoiding hasty opening of trades:
- Don’t look at the chart for too long. If you caught yourself simply monitoring the price movement, then there is a risk of involving emotions in making your decisions. You need to close the chart, whatever the situation on the market. Take a break and put your thoughts in order - take a walk, go in for sports, spend time with your family.
- Check and recheck. Before you open a trade, make sure that all the conditions correspond to your trading plan. Even when you see a good trading setup, confirm it with a couple more signals. For example, some traders who trade price action wait for the closure of another candle in the direction they need.
- Think about your plan, not about making money. When your plan is really good, it is your ability to follow it that matters, not how much you earned on each individual transaction. Try to see numbers and signals on the screen, forgetting about money. This will help to eliminate any emotions.
Well, now you know what you need to do to avoid hasty trading decisions and open trades only in the right way. Ready to give it a try?