Entering and exiting trades at the right time is critical. It is easy to spot trade set ups looking back at the charts, but seeing the whole picture forming before you can be quite a bit more difficult.
Sometimes committing to a trade can feel like jumping off a cliff. However, I’ve tried cliff jumping, and it’s actually quite fun - depending on what’s at the bottom of the cliff. If you know the water is deep enough and the cliff isn’t too high or reach out deeper into the water, then you’re good to enjoy the thrill of falling through the air and the plunge into the cool water.
But what about those people who get hurt, break their legs, or die? Obviously, they committed to jump at the wrong place. When we enter a trade, we are committing our capital. So we want to make sure we’re jumping in at the right place. A major mistake that even experienced traders make is realizing they’ve missed the entry point, but trying to hurry and make a little bit of profit of the set up anyways.
Here are some tips to make sure you commit to entering and exiting trades in the right spot:
1. When you've missed the trade, you've missed the trade. Period.
2. Know your order type, it affects how you'll be analyzing charts.
3. Learn to recognize candles.
4. Rely on the basics...not your indicators.
5. Test the waters.
You reduce risk to your body by checking the height of the cliff, depth of the water, and making sure there aren't any potentially harmful obstructions in your way when you jump. Likewise, you reduce risk to your capital when you follow these tips to make sure that you are entering and exiting trades the right way. You don't need to be afraid of trade exits and entries, but you do need to exercise safety habits to prevent a commitment to a trade you don't want to be in .