Sometimes, in trading market moves against us. What’s next? Fear. Panic. Close the position. Loss. It can do anything? Yes. Revises up position and try to understand where the market goes against you. Let’s see an example of a transaction on the merits of fear of possible losses. In the following chart, we have a buy position. Everything looks good. Entry level is 1.42600 with a target above 1.42800.
After a short climb follows a market turning against us.
As i said at the beginning, in most cases appears imminent fear of loss. Questions arise. To close with the loss of this position? Maybe down below and the loss increases.Before you rush to close your position, try to reconsider their position. Go on a time-frame higher, and try to see where it will be until the fall.
We can identify a level at which the descent can continue. In this case we have a possible halt the fall in the 1.42186-1.42305 panic calms down, moving SL just below this level.So instead of having a negative position, we could have a positive position. Everything is to eliminate fear.
In the previous analysis we determined a potential reversal area. 1.42186-1.42305. And the level where it started again growth is 1.42231 is just in that area.
So what would be preferred? Closing position at 1.42333 loss, the fund of fear? Or closing at 1.42850 after you have removed the fear and have reconsidered the position? Do not let fear to influence your trading! If you open a position that later does not look good, do not despair without a review of the situation. Be smart! Be a successful trader!