- DISCIPLINE
- SENSITIVITY
- POSITIONING
- FLEXIBILITY
- OBSERVANT
- I have mention in my first blog on trader's attitude discipline is one of the most important factor to any trader. You set your targeted profit to hit, never hold your position even if the price goes up further. A lot of trader tend to get greedy & were trapped when a sudden U-turn of price occur.
- There is always time where a trader enter a position and realise it was wrong after certain movement of price range. Never hesitate to liquidate when you have your calculated damage is reach. (Plenty of traders, at this point, still holding on. Hoping that there will be lucky star shining on them and reverse the situation.)
- But the worst attitude of most traders is that they tend to recoup their losses by increase their lots on the next entry. It may works sometime, provided you are right on your analyse. But if you are wrong, the damage will also double!
2.) SENSITIVITY
- In any war, you have to be sensitived to the surrounding of where you are. Just like in forex, you have to be sensitive to news & data. The time where they are release & what kind of impact it is going to create. These factor will sometime give you the advantage of holding on to your position or liquidate.
- Be sensitive to the calculated point of price ceiling or base. It may reverse when the calculate level is reach. (Most financial institution & traders use these level to trade for short term or long term positioning.) For more detail, please visit: http://forexoceanview.blogspot.com
- Beside calculated range, indicators used in forex provide some good signals where you should be prepared to liquidate. Normally a retracement occur at these point of contact. Be sensitive to the indicators used will help to reduce risks!
3.) POSITIONING
- Always remember to check your position before entry. But if you forget, make sure you didn't position yourselves towards the end of the trend where people start to retreat.
- When we talk about positioning, there are 5 stages to watch out for, they are:
a.) Beginning stage (Traders start to enter, but slow.)
b.) Advance stage (Price start to move forward, indicating more traders are joining in.)
c.) Holding stage (Price whipsaw within certain range, indecisive on traders decision. This is a point to be cautious.)
d.) Testing stage (Price goes to a wide range but was not closed. Can be signal of continuous advance or retreat.)
e.) Retreating stage (Price normally reached the extreme targeted range and reverse.)
- Knowing which stage you are in will definitely be an advantage. It is normally the mid-range level that is hard to predict, especially when you enter at holding or testing stages. To know more, please visit: http://forexoceanview.blogspot.com/
4.) FLEXIBILITY
- To assert flexibility means that if there is a sudden change in condition, get out of your position even if you have not reach your targeted profit! Some traders advised to set your limit and let it run on it's own. But situation change everytime, if you intend to be a successful trader, than watch your screen for tell-tale sign. Just like you cannot predict the weather, also there to prepare for the reversal.
- If you are on the trend where price are moving towards your advantage, upon reaching your target, set a stop-loss level where profit margin is & let it proceed further. (Just like during a war when you conquered a land, a fortress is build to prevent counter attack from your enemy.) It will build-up your profit level and at the same time, safe keep your already gain profit.
- Alternatively, you can also increase your entry lot upon your targeted profit is met. And set a stop-loss at your already profited level. (It's the same where you increase your army strength to further attack but still safe-keep the place that you had already conquered.)
5.) OBSERVANT
- During entry, if you have been holding position for quite sometimes, and your profit margin still not reach. Do observe the timing of news & data release. Price react upon release of news & data, be it positive or negative. If you believe that these data release will be at your advantages, of course, there will be no worry on holding it. But what if it is not? (To observe the timing on entry & exit are very important. Will you launch an attack on your enemy when you do not know if they are preparing for you?)
- A very bad habit of some traders are, their eyes tend to stick to the price ticket more than the chart itself. Very often they forgotten that signal from the chart are much more important to observe than price ticket movement. By observing the chart, you will know if your position are in the flow of trend or the end of it. (You don't ask your soldiers to keep on charging forward without knowing what is ahead! Do observe!)
