Sometimes we put down a trade and do not realize that it is going to fail right up until the end when the chart suddenly drops lower than we needed it to or than we could have anticipated. And it is at these moments that we regret that we cannot really see into the future and predict the movements of our trades.
But sometimes we can get early warnings about a trade. You would be surprised, but sometimes we can see the signs that a trade is going to fail pretty early on. If you want to know what these signs are, keep on reading!
1. You price doesn’t go in desired direction.
2. Price fails and is not going back to the old level.
3. You keep on losing to the falling position.
4. The volumes are too high.
1. You price doesn’t go in desired direction.
Imagine that you have opened the position and the price is not really moving in the needed direction. In fact, It might not even move at all. Of course we can wait and see what will happen next but there is little chance that after a few pips which took your chart lower when you decided to BUY the trade is suddenly going to go higher.
Flat or going-in-the-opposite-direction trades usually indicate the end of a trend which means that you either have to change your goals or abandon the trade altogether. It is better to come back when the trend is back again.
2. Price fails and is not going back to the old level.
It is possible to open a position right before that reversal of the trend. And it is possible that the point where the price reversed the movement can’t be reached by an asset anymore. This means that there is no steam to go on with the rally and that you are not going to see previous heights.
Moreover, after the uptrend it is possible that we are going to be looking at a whole new downtrend, so earning in this case are really all out of the question. This loss can be a sign of a failing trade pretty early on.
3. You keep on losing to the falling position.
This one is on us. Sometime we can get too excited and to hope for a soon-to-be recovery and keep on adding to the losing position hoping to see profits soon. And when you notice something like that in your pattern of trading this means that you have been stuck in a failing trade and that you have ignored early signs of it.
Be more careful.
4. The volumes are too high.
Average daily volume is a big deal. And you need to keep track of it in order to have a full understanding of the real situation in the markets. When the volumes are too high [higher than the average in 3 or 4 times] that means that you are not going to see a whole lot of earnings. High volumes usually come after good news or favorable reports and they mean that everyone trades right now. You are just going to be lost in the overall volume of traders and even if you do see some earnings, they are not going to be awfully high due to high level of trading.
High volumes is something that you can see upfront and decide for yourself – maybe this trade is not for you after all.
Taking these easy steps, you are going to be able to see failing trade very early on. Of course to make the task even easier for yourself, you can simply use our trading signals which are going to tell you when you shouldn’t put down a certain trade. Combining that with the implementation of these signs is certainly going to help you minimize the losses of your time and money.
