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The Chicken and the Egg
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PristineTrading, in Tech Analysis
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By inthemoneystocks
One of the most important reasons why traders take big losses is because they often fail to recognize when a trade has gone wrong. You see, stopping out of a trade is probably the biggest fault of traders and investors. Often, this happens to young and inexperienced traders and investors, but I know many veteran traders and investors that struggle with this as well. Early in my own career I struggled with stopping out of a bad trade myself, so I can sympathize with this problem.
The problem with taking a loss is really two fold. First, the trader has to admit that he is wrong. As you all know, as human beings we all hate to be wrong. The ego simply gets in the way and we all want to always be right all the time. The first secret in this business is to check the ego at the door. The market does not care about your the color of your skin, religion or anything else. It will move in the direction of the money and that is the bottom line. Once a trader or investor goes into what I call 'hope mode' the trade is over. I'm sure everyone has been in this position at one time or another. Simply put there is no room for ego or hope in the stock market. The market is always right and there is no reason to fight it.
Here is the second problem with taking a loss, it hurts. Pain and pleasure are the two reasons why humans do anything at all. As a human being, we are always looking to have pleasure and avoid pain. Well, losing money is painful and many people would rather simply hold a losing equity than lock in a small loss and move on. I cannot tell you how often I see a trader hold a losing trade only to see the position move further out of the money. Many years ago I watched a day trader blow up a $200,000 account in a single day averaging in on a bad day trade. To this day I can remember the look on his face as his money vanished in thin air. Believe it or not, this trader could have exited the position with a $500.00 loss, but instead he kept averaging in and fighting the position until he was wiped out. As a rule, once you have your full position you should never average in on a trade. At that point, it is critical to know where your max loss is going to be and stop out if that level is breached.
Now when should we stop out? The answer to this question is not that simple, but here is what I personally do. I always place my stop loss below an important breakout or pivot on the chart. You see, prior breakout or pivot levels are usually defended when retested. After all, this is usually an area where institutional traders and investors got involved, that is why there is a pivot low or high on the chart to begin with. If that level is breached on a closing basis then I will move out of the position. So If I took a trade based on a daily chart pattern then I will usually check the daily and weekly chart levels. If there is a major pivot on the weekly chart then I will use a week chart close as my stop out level. While this method may not be perfect, it has saved me from much bigger losses when I have been wrong.
Nicholas Santiago -
By adamal7
Hello guys,
I'm starting to swing trade commodities, especially soft commodities (corn, sugar, coffee, cotton, soybean, ...). I'm also checking gold and oil.
My problem is I'd like to know what is the best broker for trading those markets (regulated, large commodity choice) ? For CFD trading.
I'm thinking of IC MARKETS who are very good with forex and have good trading conditions.
The concern I have is that I need a broker that offers MT4 as a platform, and also I'd like to be able to open mini lots positions for a better risk management.
As a swing trader, I'm less concerned by the spread but looking at the financing fees.
Wish you have a nice day, and thanks in advance.
Alexandre.
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By HFblogNews · Posted
Date: 24th April 2024. Market News – Stock markets strengthen as tech rally widens. Economic Indicators & Central Banks: The bulls are back in town for now. Wall Street climbed, led by tech and especially the Magnificent 7 — all cohorts rallied, even Tesla which broke a 7-session losing streak even as its earnings news was awaited. US: The weaker than expected PMI data from S&P Global was the excuse needed to underpin a short covering rally in Treasuries after the big selloff in April. Record US Auction boosted demand! A well bid 2-year sale also added to the gains in Treasuries, while signs of future price pressures saw the long end underperform. Demand petered out into the finish, however, especially with the surge on Wall Street, and yields edged off their lows. Australia: The hot inflation print pointed to sticky local price pressures and reinforced the case for the RBA to hold rates at a 12-year high. The CPI rose to 3.6% y/y VS 3.5% estimate, while core CPI rose 4%, also higher than forecast and well above the RBA’s 2-3% target. Japan: Strong warning for intervention by officials. The BoJ is widely expected on Friday to leave policy settings & bond purchase amounts unchanged. NEW YORK (AP) — The Biden administration has finalized a new rule set to make millions more salaried workers eligible for overtime pay in the US. Financial Markets Performance: The USDIndex slumped, falling to 105.39 largely on profit taking and as haven demand faded. USDJPY flirts with 155 after FM Suzuki issued the strongest warning to date on the chance of intervention, saying last week’s meeting with US and South Korean counterparts had laid the groundwork for Tokyo to act against excessive Yen moves. AUDUSD up for a 3rd day in a row, to 0.6528 amid a broadly weaker USD but also a strong Aussie post a hot inflation print. USOIL steady at $83 ahead of sanctions against Iran and shrinking US Inventories. Gold closed slightly lower at $2332, but off yesterday’s $2289 nadir. Market Trends: The NASDAQ increased 1.59%, with the S&P500 up 1.20%, while the Dow rallied 0.69%. Dissipating geopolitical risks also supported. EU stock futures are posting gains, after a largely stronger close across Asia. Nikkei and Hang Seng gained more than 2% amid a strengthening tech rally. Australian shares underperformed. Tesla Inc. (+13.33% after hours) spiked after its statement for the launch of more affordable vehicles despite a sales miss. The stock halted a 7-day plunge, climbing alongside other members of the group. Microsoft Corp., Meta Platforms Inc. and Alphabet Inc. are also due to report earnings this week. Profits for the “Magnificent Seven” group — which also includes Apple Inc., Amazon.com Inc. and Nvidia Corp. — are forecast to rise about 40% in the Q1 a year ago, according to Bloomberg Intelligence data. The group of tech megacaps is crucial to the S&P 500 since the companies carry the heaviest weightings in the benchmark. Visa revenue advanced by 17% as Consumer Card spending increased. Always trade with strict risk management. Your capital is the single most important aspect of your trading business. Please note that times displayed based on local time zone and are from time of writing this report. Click HERE to access the full HFM Economic calendar. Want to learn to trade and analyse the markets? Join our webinars and get analysis and trading ideas combined with better understanding on how markets work. Click HERE to register for FREE! Click HERE to READ more Market news. Andria Pichidi Market Analyst HFMarkets Disclaimer: This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in FX and CFDs products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission. -
By Stocks4life · Posted
$TDW Tidewater stock, sweet bounce off the 88.65 support area, https://stockconsultant.com/?TDW -
By Stocks4life · Posted
$SKYW Skywest stock another great day on the breakout, https://stockconsultant.com/?SKYW -
By Stocks4life · Posted
$CVNA Carvana stock great day off 71.27 support area, from Stocks To Watch, https://stockconsultant.com/?CVNA -
By Stocks4life · Posted
$VNOM Viper Energy stock, strong trend back to 39.02 support area, https://stockconsultant.com/?VNOM
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