A military sniper's edge is not only crucial, it's also extremely extensive! Determining distance, selecting camouflage, preparing a suitable location, making sure that the rifle is well-sighted, having the correct mindset and showing patience are just some of the components that help form a sniper's edge in the field. Without it, there could potentially be fatal consequences. Fortunately, for us civilians we don't have to deal with the stresses of conflict. What we can do from here, however, is apply some of these elements a sniper uses to form a complete trading edge. What we mean by 'complete' is simply an edge which has all the necessary components to achieve consistency in the market.
Even the best forex traders in the world have losing trades - losing is a part of trading - but how do you react when you lose? How do you feel? If you're angry or sad; chances are you were risking too much, or taking a trade you knew you shouldn't - or both.
Like most folks, the thought of low-paying government pensions, working in your seventies and, just, well, working in general, usually brings a sour taste to one's mouth. A lot of people are often left thinking that there must be more to life than this! As a matter of a fact, according to the Telegraph UK, most people at work are miserable. Shocker!
Visualise yourself perfecting your trading method: spending countless hours working on a perfect system that has a 90% win rate and small losses. You study, study, study, and study again. At a certain point, the back-tested results give you the confidence to take it live.
Have you ever pulled the plug on a trade, only to see it cover 200+ pips in the next few hours? I have, and it's not a nice feeling. Vice versa: have you ever held onto a losing trade, thinking that the market had to turn around sooner or later? Again, I've done that. I've widened my stop loss, exposing more of my capital to the market. These are direct violations of the one rule that we simply cannot ignore: cut losses quickly and let winners ride as long as (logically) possible.
Observing sharp moves form in the foreign exchange market followed by periods of consolidation is common viewing.
The problem traders have, though, is deciphering whether...
ActionForex.com was set up back in 2004 with the aim to provide insightful analysis to forex traders, serving the trading community for over a decade. Empowering the individual traders was, is, and will always be our motto going forward.