Why is it that the trades I don’t take often turn out to be easy wins, while the ones I actually enter end up being losses? I focus on supply and demand trading. I wait for the price to reach my point of interest, then I switch to lower time frames to look for a change of character (choch) and identify either new supply or demand zones. I wait for the price to enter these zones before I make my entry. However, it seems like whenever the price doesn’t quite hit my poi on the lower time frames, it misses by just a few pips and then pivots perfectly in the direction I anticipated, resulting in easy profits. On the other hand, when I do take a trade, it often results in a stop loss.
One response
It sounds like you’re experiencing a common frustration among traders, where it seems like the setups you don’t take end up being the most profitable while the ones you do take result in losses. Here are a few thoughts that might help:
Psychology of Trading: This is often tied to the psychological aspect of trading. Our minds tend to focus on the instances where we missed out on a good trade, which can lead to feelings of regret or frustration. It might help to track your performance more quantitatively to gain a clearer perspective on your overall success rate.
Market Conditions: Sometimes market conditions may not align perfectly with your strategy. If you’re trading supply and demand, it’s possible that certain market phases could render your zones less effective. Keeping an eye on overall market trend and sentiment can help you align your trades better.
Trade Execution: Ensure that you’re executing your strategy consistently. Small variables in your analysis or execution steps can have a big impact. If possible, review your past trades to identify any patterns in the ones that resulted in losses versus the ones you didn’t take.
Stop-Loss Placement: Consider whether your stop-loss placements are appropriately set given the volatility of the market. Sometimes they can be too tight, leading to getting stopped out before the price moves in your favor.
Practice Patience: Trading can require a considerable amount of patience. It’s great that you’re waiting for price to reach your point of interest, but ensure you’re also being patient with your trades that do trigger. Sometimes they take longer to develop than expected, but that doesn’t necessarily mean they’re invalidated.
Review and Adjust: Continually review your criteria for entering and exiting trades. As you gain more experience and learn from each trade—win or lose—you’ll refine your strategy further.
Avoiding Hindsight Bias: It’s easy to look back and think, “If only I’d taken that trade…” Remember that not all setups will play out as expected in the future, even if they seem ideal in hindsight.
Overall, focus on maintaining a disciplined approach, regularly review your performance, and adjust your methods as you learn more about your trading style and market behavior. Good luck!