Last week I wrote that my plan was to go short EURGBP and long USDCHF depending on certain levels that must be reached and confirmation in terms of candlesticks. You can find the post from last week here.
From the charts below you can see those levels I pointed out last week was reached, but price blew right through them.
EURGBP:
USDCHF:
In both cases you’ll see that there were never confirmation in terms of candlesticks so I never entered. Like I pointed out last week, I will need to see pin bars (hammer / shooting star) or an engulfing candle before I will consider entering.
I always wait for confirmation before I enter a trade because I’ve tried entering blind at support / resistance before and it never worked for me. Whenever I entered blind I never knew exactly where to place my stops. I also noticed that my trades tended to stay under water for longer which messed with my emotions more. Because I didn’t have to wait for confirmation I was in a lot more trades at the same time, and juggling many trades was not fun. I was also stopped out more frequently.
You see, trading is all about probabilities. Any given trade is never a sure thing, so you always want to stack the odds in your favor. In the above charts the trend was in our favor. Then by trading from an area of value as indicated in the above charts, it put the odds more in our favor. And if there was confirmation in terms of a candlestick pattern the odds would’ve been even more in your favor.
I’m not saying that entering blind can’t / won’t work. I’m just trying to get you to understand that this is a game of probabilities and how a little more patience and discipline by waiting for additional confirmation can increase your odds of winning on any given trade.
No matter if you enter blind or always wait for some extra confirmation, remember it is your risk management that will save you more times than not. Also, always obey your stops and never bet the farm.
By the way, EURGBP now made a higher high and USDCHF is testing some important support. I don’t trade them all, but I love to watch how price reacts to areas of importance.
On Ideas: Please don’t take this as trading advise. Please do your own due diligence before entering any trade. Also see Disclaimers.
Thanks for reading.
Thanks and Regards,
Trading SOS SOS