or in other words, Greed Kills ! as the market will tell you where it will likely to go, not your Profits/Losses!!
why? if you enter late, your position size will be smaller, because you will need a wider stop point (not really a big thing, just the reward is smaller, and the time the trade is “red” may be longer, nothing that can kill us, and in the end ist money being made.
but if you exit too late (or greed makes you stay in the trade),
especially in smaller timeframes, that can have Fatal results.
screenshoots where made Today 21 Sept. 2017 on NZDUSD in Asia Session.
Plan of the day is to trade the Breakout Downwards.
looks very simple and straightforward. but the chart does NOT tell us where we should take the profit.
so we zoom out and find draw a Trendline (White color) connecting a few Resistance and Support points (the more the better)
looks a bit tiny the space between price and the line we just drew, but we will have a 4pip stop on this to the vWap
so a 17 pip drop gives us a R4.24 (or Risk to Reward 1: 4.24) .. and that is pretty good!
so let’s zoom in a bit to see it more clearly.
(sorry the white line from above is here blue (used the screenshot from this blog post))
let us see what happens 42 Minutes after:
Bingo! the Whole range of 17 Pips where spanned with just one Candle .. touching exactly the trendline we drew before.
and almost in the very same second, the price pulls back from it.
here is another screenshoot another 14 Minutes later:
as you can see, the price action afterwards would have Completly eliminated your trade and made you a loss instead.
keep in mind: