Newer traders are often prone to over-trading. Taking too many trades can come from the feeling that you will miss out on the opportunity to make money if you do not take every trade that comes along. When we trade, we must be selective as to when we enter into the markets. Once you have learned the basics of supply and demand and trend, you must be able to filter out scenarios that offer a high reward potential with low risk and a high probability for success. The traders that make the most money usually make fewer trades. They are patient and take only the best trades with high probability.
In our courses and also in the Extended Learning Track, (Online Trading Academy’s online mentoring), we teach these techniques for filtering trades to find the best opportunities. It is not difficult, it just takes discipline and patience to look objectively at the markets and evaluate what you are seeing on the charts. By doing this, a trader can easily avoid entering into marginal trades that often lose us money.
Think about demand. This is an area where prices stopped dropping and started to rise. If we are going to buy in that area of demand in the future, how should that area look? Should price leave the area slowly with small candles and a mix of red and green? Or should it leave fast with larger green candles and perhaps gaps in between candles? The second example obviously shows that there is more buying pressure in that area and a greater chance for a rise should prices drop to that area again. This offers the trader a higher probability for trading success than buying at the first example.
Take the following examples, which would you rather buy?
So come visit Online Trading Academy and learn how to select the right trades. By doing so you should see a dramatic improvement in your trading success and that is what we are all striving for!