What distinguished a professional traders from a beginner?
Trading without losing trades is the ultimate dream of the average forex kun, forcing him to shovel the chart day after day in search of the Holy Grail.
During the existence of the market, accessible not only to professional participants, but also to the masses in the community of traders, a lot of questions have accumulated regarding the "correctness" and "incorrectness" of trading. Which is better: stock or forex? Scalping or medium term? Go to the disciples of the "guru" or learn market wisdom on their own? Set feet or trade without them?
In fact, the problem of stops on the market is of concern only to beginners. Many of us, starting our career as a trader, have come across more than once situations where the price makes a stop set for a “corner” (extreme), and then joyfully and enthusiastically goes in our direction, but without us.
Clever trading textbooks, webinars and seminars, expensive courses of renowned gurus - all of them with one voice make us put a stop at the extreme! That is, exactly where he constantly cuts it!
In fact, everyone wants us to quickly merge
Indeed, markets have their own specifics. And there are 2 main points spoiling the "book" trading methods:
1. The presence in the market of a situation of "false breakdown", that is, the very unfortunate removal of stops by a major player to collect someone else's liquidity.
2. The flat nature of the forex market. When the price mostly goes in the corridor of 40-70 points and often returns to the profitable zone, even if it went against us first.
Accordingly, seeing a loss-closed transaction that could be closed in plus after a couple of hours and tired of crying into a pillow about unearned profit, the trader comes to a simple and uncomplicated thought!
And then two options usually happen:
1. The deposit merges quickly.
2. The deposit merges very quickly.
When talking about stops, any professional trader will tell you only two things.
Stoplos is an integral part of the trader's business.
Just as in a traditional business there are operating expenses and risks that cannot be avoided when conducting a business, so a business trader requires expenses for spread, commission, money transfers, taxes, platform fees and ... unprofitable transactions. What do you think? The task of the trader, as the head of his business, is to make profitable transactions more than cover all expenses.
And here we suddenly come to a trading strategy. So that our deal does not endure a false breakdown, then why not take the deal after the appearance of this false breakdown. If the stop takes out in the flat market, then why not wait until the price reaches the borders of this flat?
This is exactly what distinguishes a professional trader from a beginner. It is a professional trader who knows how to wait and understands what exactly he is waiting for! And when he waited, he acts without much thought. A professional trader understands how the market should behave after the appearance of a “signal”. And if the market does not do what the trader expects of him, then he simply closes the deal without worrying about losses. A newbie, not really understanding the logic of price movement, does not know how to wait for his entry and does not have a market flair that comes only with experience. Therefore, he often opens deals not there, but after receiving a loss, he thinks that he was taught to put his feet so that he merges quickly.