Situations in which it is better to give up trading [Forex]

Undoubtedly, one of the reasons that many traders have a problem with achieving regular profits on the market is the desire for continuous "Being in the market". There is a mistaken belief that this is the only way to earn money regularly. In addition, there is an internal need to prove to yourself that "You can earn", being right and using every opportunity "Occasion".

Constantly hunting for signals, testing new indicators, jumping all the time frames is not the best way to trade. Interestingly, in most cases, reducing the number of transactions can have a very positive effect on trading results. We are all just human beings, we have our own problems, and the financial markets are a very demanding environment - especially from the psychological point of view. For this reason, there are times when it is better to just let go than to risk losing capital unnecessarily. In this article, we will discuss situations when out of position is a better option.

Be sure to read: 7 myths about Forex trading

You think about a transaction

Trade is often referred to as business "Recognition of formations". An investor who has experience and has made many transactions in his life knows the difference between a high probability setup and one that doesn't bode well. If you think about it a lot when entering a position, it is usually better to let it go and wait for the next better signal.

You don't know where to put Stop Loss

Even if you think you see a great opportunity, it doesn't mean you always have to open a position. If you can't find a reasonable level for the job stop loss, or if it would have to be located too far, which automatically prevents you from getting a good R: R, it is better to skip such a transaction.

The market is not conducive to your system

It is very important to know and be aware of your trading assumptions. You should be fully aware of how our system works and what are its strengths and weaknesses. If it follows a trend, you focus on momentum analysis. When trading in consolidation, you usually look for the right price ranges. Knowing the answer to these questions you know in which environment you should trade and in which not. If the market situation does not meet the assumptions of the system, quit trading and calmly wait for the development of the situation.

You want to "make up for losses" by force

It is often the case that when closing a transaction with a loss, one is already thinking about the next. There is nothing wrong with this type of approach if we keep our head cool and stick to our assumptions. However, if you are thinking instinctively about, for example, increasing the size of the position to proverbial forging, a much better idea would be to relax from trading. There is no transaction that will earn you in 100%. Attempt to make up for losses through overtrading or increasing the size of orders, as a rule, never ends well and you start dealing with gambling more than investing.

Be sure to read: A series of trading losses - How to deal with it?

When you don't plan to play

Every setup you want to play should be included in the trading plan. Never get into a position without preparation. Having a specific plan before speculating should be a habit and a duty for anyone who is serious about trading and takes their tasks seriously.

When you focus only on results

Certainly, almost every trader had a situation when he literally needed one or two good transactions to end a given period profitably or to achieve some goal. As a rule, however, entering the so-called forced setups are nowhere. You should never judge your progress against weekly or monthly results. We are not able to control how the price changes. You should always be open and take those transactions that appear on the market without forcing yourself to do anything.

When you have health problems, be personal

Professional trading, i.e. one in which our goal is to generate regular profits, requires commitment and attention. If you can't focus on charts and market analysis in 100%, get away from the computer and take a break. Remember that personal problems, quarrels with your spouse, problems at work or worse health will always affect your investment decisions, to a greater or lesser extent. The market is open five days a week and just because you did not conclude a transaction on a given day does not mean that the next one will not be an interesting opportunity to open it. You can always find a new setup, but you can't recover lost money by making mistakes that can be avoided.

Hand only when you run out of reasons not to trade☺