Home Trading Strategies 4 Trading Traps To Avoid Before You Put On A Trade

4 Trading Traps To Avoid Before You Put On A Trade

19
0
4 Trading Traps To Avoid Before You Put On A Trade

hey hey what’s up my friend so in today’s episode right I want to share with you four things to avoid when you put on a tree okay so first thing first is number one you want to be aware right off buying into resistance or you know selling on shorting into support and often I when traders they click buy they are not aware that they actually know buying into an obstacle get buy into an area of resistance right if you zoom out your chest a little bit sometimes you might realize Oh mate I’m actually buying into a area of resistance this is where sellers could potentially come in so be aware of this right when you click the Buy button right be aware that you’re not buying into a resistance area and usually if you are to zoom in in your chance you might not see this so just zoom on your chest a little bit right look at the big picture and see where you’re actually buying into right and avoid buying into an area of resistance and avoid shorting into an area of support number two you don’t want to be buying right when the price is overextended right so how do you tell whether the market is overextended right so the market is overextended when let’s say for example you overlay the fifty period moving average on a price chart and you notice the price you know has bounced off the 50m a number of times and right now the price imagine that it’s very far away from the 50 period moving average it’s overstretch away from the 50 period moving average and you know don’t be buying at this point in time because if the price reverse if it pulls back towards the 50 ma again there’s a good chance that you’ll get stopped out right if you’re buying when the price is high and if we you know pulls back towards the 50 ma again you will likely get stopped out so be aware of this I don’t buy when the market is over stretch and you don’t have to use just a 50 ma to to define whether the market is over stretch or not you can use a tool like drawing trend channel so you can draw the upper boundary the lower boundary if the price again right if it’s near the upper boundary you don’t want to be buying or I look to buy when the price is near the lower area of the trend channel that would make more sense number three avoid chasing the markets alright this is especially when they picked I know the candles are bullish so huge right things are exciting let me buy and the problem with chasing markets is that this is where market is prone to reversal this is where the market is prone to a pullback and when you chase the market right usually there’s no like flaw or support right then you can lead against to set your stop loss and this is why it’s very common for the market to video explode up higher only to reverse back and you know give back all their yeah their gains pretty quickly because there’s no floor there is no swing load there’s no area of support to hold up these higher prices if there’s no you know structure in the markets to hold up these higher prices the price could just you know reverse back in the opposite direction and guess what when you buy when you chase breakouts okay and that happens you get stopped up pretty quickly as well okay so avoid chasing the market and one last thing the fourth thing is avoid trading in case the trend you want to be aware of whether you’re trading with the trend or against the trend alright you can’t become the trend trades but I would say you know you are it’s far easier to make money when you’re trading with the trade right when you’re trading with the trend your profit potential is greater why do I say that because if you look at for example an uptrend there is two legs in an uptrend the trending move where the the price you know moves in the direction of the trend and the retracement move or the pullback move however you call it this is where the it is the retracement of the against the trend if you look at the distance of you know both legs the trending move is where the market moves much more compared to a retracement move wage where the profit potential its lesser so if you’re trading with the train your profit potential is greater if you trade against the trend your profit potential is clearly lower so if you wanna you know find an easier way to make money trading with the trend right would be my suggestion okay so these are the four things that you want to pay attention to and also to avoid right whenever you put on a trade and one last bonus tip for you whenever you you trade okay you wanna be app where of what the higher time frame is doing is well let’s say you are entering on the daily timeframe right don’t just you know look at your daily timeframe and then just make your decisions from there right look at what a weekly timeframe is doing right and to make sure that you are you’re aligned rightly your trading direction is aligned with the higher time frame as well so for example if you are buying let’s say breakout on the daily timeframe look at the weekly timeframe and make sure that you know the market is at least in a range or in an uptrend you don’t be buying breakout on a daily timeframe when a weekly is it a downtrend right that’s a low probability breakup trade right so be aware of what the higher time frame is doing when the both time frames the trend direction are aligned right that’s where you find a higher probability trading setup all right so that’s it I have come towards the end of today’s episode and I wish you good luck and good trading I will talk to you soon you

LEAVE A REPLY

Please enter your comment!
Please enter your name here