One in the Bank is as Good as Two on the Chart

One in the Bank is as Good as Two on the Chart

I’m sure there are times when all of us look at a chart during a trade and think, ‘I really need to lock in that profit before the market turns’. But what happens if this decision goes against your system that you have worked so hard to establish over hours and possibly even years of paper and real trading? I’m not going to lie, I struggle with this myself more often then I would like.

I’m sure there are times when all of us look at a chart during a trade and think, ‘I really need to lock in that profit before the market turns’. But what happens if this decision goes against your system that you have worked so hard to establish over hours and possibly even years of paper and real trading? I’m not going to lie, I struggle with this myself more often then I would like.

My system is not very heavy on technical indicators, so I have to use alot of solid trend following while using discipline when trading with resistance levels. My ideal trade is following a trend that does not move too quickly in any direction when looking at 1 hour charts. If the currency pair starts to move quickly, I monitor my trade very closely. If all of the sudden, there is a favorable turn in the direction I am trading because a news flash had more of an effect than I thought it would, there is a good chance I am going to lock in this profit. Does this mean that I am breaking my system to take these pips? I don’t think so at all. I will simply take the profit, watch to see if the pair returns to the normal pattern I was looking for, and then get back in if the news didn’t effect the overall trend. This way I have my bird in hand, and I can deal with the birds in the bush later.

After all of the trades that I have made, I can honestly say that I am now disciplined enough to not get upset if I take a 50 pip profit when my gut tells me to get out, and then the pair keeps trending and would have given me 200. Many wise traders I have come to listen to have told me that ‘disciplined traders always live to trade another day’. And another great quote is, ‘there is always going to be another trade’. I have also trained myself to know it’s ok to not be in a trade all of the time. Acutally, the more I trade, the less I trade if you get what I mean.

Systems that are based solely on technical analysis and automatic systems can be very profitable in the hands of the right trader. But I guarantee that the majority of the top traders also make frequent ‘from the gut’ calls in their trading. I think this is just the general nature of someone who understands capital preservation. I am going to write an article about my definition of trading discipline in forex. I think I have earned the right to be able to write this article based solely on the fact that I am nowhere near 30 years old, and I paper and demo traded forex for 5 years to start my journey into this beast of a market. I think that begins to qualify me as disciplined and humble in the eyes of those who want to jump in and make MONEY MONEY MONEY!

How many of you have a system but frequently go with your gut when the waters get rough?

So where should I begin? First of all, I am not a professional analyst, I just love to talk investing and have been at it for a few years. I started swing trading my freshman year in college and continued that until graduation with a good bit of success. During my Ph.D. training, I started learning and trading forex, a hobby of mine that is still in place today. I have built a strategy based solely on technical indicators that I programmed into MetaTrader... More