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Posts Tagged ‘Trade’

Now as you get started in your quest to develop your skills as a forex trader one of the  things you will be tempted to do is to change around the time frame you use for trading. For example you might want use the 15 minute time frame for conducting your technical analysis in the market. This is fine and really depending on your strategy you can choose to use a number of different time frames. So back to our example you have started out analysing the market at the 15 min time period and then you have decided there is an opportunity in the market.

You enter a trade with your broker and it all appears to be going OK. You expected the market to go up and it has been, but it hasn’t really gone as far as you might have liked your profit is very small and surely based on your research it will travel higher. It has now in fact appears to have turned against your proposed trade and you are looking likely to lose money on this deal. So you now choose to change your time period for the trade to a 5 minute interval, it seems reasonable you don’t have a close enough view with a 15 minute interval. The market now looks OK, it even appears like it might or has turned up again  a small spike occurs in the market, but these are fleeting and difficult to catch. but you breathed a slight sigh of relief. You can now be happier. Then it appears that the market is turning down again and well it looks kind of strange, as the fall seems quicker and larger. Your perception of the market behavior is altered to how you originally decided to take your market position. Of course you could take the other tack and move the time frame out looking also to save a falling trade looking for a longer term downside.

Many of these will end up with a margin call situation and disaster is not culled. This is a difficult idea for some new traders to swallow and will be a hard lesson learned by some.  s trade that is taking you negative is  a bad trade at the best of times an learning to close them out early and take a small loss is a clever trading tactic

Happy trading

Peter