Trading Psychology - Entry and Exit

One of the major problems faced by people who enter into trading and which they continue to face till they become professional traders is the difficulty that they face in choosing the right moment to enter and exit trades. I am no exception and i have faced the same situation when i started out trading and it took me close to 4-5 yrs to get to the right moment to enter/exit trades.

The trick behind entering any good trade is to cut out the emotion behind the entry. Normally what we do is that we see price rising and immediately, we are tempted into entering a long. The temptation is too strong. Guess what !! Thats exactly what the pros want you to do. Give in to emotions, give in to your temptations. They want you to trade emotionally. And the trick to be a successful trader is to do the opposite of what the pros want you to do. Why ? Cos thats what they do. They never enter on seeing rising prices.

Trading, as such, is very easy. All you need to do is to open a 1H or 4H or daily chart and you can easily see places where prices had reversed earlier and or had been well supported. All that you have to do is wait for price to reach such areas and take the trades accordingly. Its so easy on the face of it. But why do all of us struggle in doing this simple thing ? Its because of our emotions and our lack of discipline. We see a previous resistance being broken and price running up and we immediately jump into the bandwagon without noticing the simple logic that any good break will almost always be followed by a retracement back into the resistance region. We see price running up 50 pips after the break and we enter there and when there is a retrace back into the resistance region, we are down 50 pips, we get too scared and we close to escape more drawdown. Wat happens? Price simply moves up again to where we thought it would.

The key to successful trading is to control your emotions and have discipline. Wait for good entries, they are always there and will always be there. All you need to do is wait. Have patience, have discipline. You will succeed. I promise.

Daily Outlook for EURUSD

Attached is the 1H chart for EURUSD. Here we can see that yesterday, we had a nice run up and down and thats what has been happening in the past 1 week on all pairs. They have been ranging very nicely which is like hell for the swing traders and a dream come true for day traders.

Anyway, coming back to this pair, this broke through crucial resistance at 1.3916 and had a nice run up to close to 1.4 where is a major psychological resistance. After that, it meandered around aimlessly for sometime as it was caught between support at 1.3916 and resistance at 1.4. In the last few hours, we have seen that the support at 1.3916 has been broken and it looks like a convincing break to me.

We might have a visit back to 1.3920 pretty soon and that will be crucial. If the visit back to 1.3920 leads to a break, then we are in for more upside. Else, we will be seeing more downside with 1.3920 acting as resistance.

On the upside, the resistances are at 1.3920 and then a major one at 1.4 and then at 1.41.

On the downside, the supports are at 1.3885 and then at 1.3825.

For today, as said above, the visit to 1.3920 will be crucial but my gut feel is that EU has more downside than upside today.

Fxstreet Analyst

A nice thing has happened over the past 1 week for me. I was contacted by Fxstreet and i was asked whether i would be willing to join their analyst team. I gave it a thought and then decided, why not ??!! It will help me reach out to some more people and also help me share knowledge and experience and would hence help me and others grow as well.

So, i have joined the Fxstreet analyst team and in a few days time, you can see my reports and articles on Fxstreet as well. I will try to improve and increase the articles that i write and i hope to bring a variety. So do look out for me at Fxstreet as well !!

Daily Outlook for EURUSD

Attached is the 1H chart for EURUSD. The tough ways of trading continues in all the pairs with all of them ranging within specific price ranges making it a nightmare for swing traders and a dream come true for day traders. Like in other pairs, this pair also rose nicely yesterday and went upto the strong resistance at 1.3916.

There has been previous resistance around this area and this proved to be a very tough resistance to break once again. Several attempts were made to break this resistance, as can be seen from the chart, but all of them failed. As you can see from the charts, the subsequent attempts at breaking this resistance was being done at lower and lower volume which means that the buyers were being dried up slowly and once the buyers were all dried up, the price fell.

For today, 1.3916 would be crucial. A clean break of this would lead to higher prices in this pair but unless this price is broken, we should see more downside.

On the upside, the resistance is at 1.3916 and if this does get broken, the next resistance is at 1.4.

On the downside, the support is at 1.38 which is quite a strong support and then at 1.3750.

Daily Outlook for EURUSD

Attached is the 1H chart for EURUSD. For most part of the day yesterday, this pair was ranging but it was clear that it had a bearish bias. Finally, during the US session, this pair broke down and also broke through an important support at around 1.38. This price area had been serving as a very strong support for quite some weeks now.

The fact that this support area has been broken leads us to the premise that more downside is possible in this pair. For today, i expect a slight retrace back to 1.38 and then for the fall to continue.

For the downside, the supports are at 1.3745 and then at 1.3672. A break of this support would lead the price to go down to 1.3430.

On the upside, the resistances are at 1.38 and then at 1.3850. For today, i expect more movement downward and i do not expect 1.3850 to be broken.

Updates on Signal Service

Last week was a very rough and tough week for a lot of traders including me. The Monday started off very badly with us losing a little more than 300 pips for the day. We recovered more than half of that during Tuesday. Wednesday was bad again with us losing about 180 pips but we made that all up on Thursday. We again made more than 100 pips on Friday which ensured that we lost only 100 pips for the whole of the week.

To compensate for the people on trial and paid service, i decided to extend the trial for those already on trial, by a week and also extended the period for the paid subscribers for a couple of days.

Today was again a good day with us making close to 100 pips for the day. I have reduced the number of calls but increased the success percentage. So, a bit boring as the number of trades is less but i would rather take a boring successful day rather than an exciting losing day...

I would continue my posting of analysis from tomorrow.