It’s just a matter of time…..

Have you ever been in a situation whereby you were in a trade, price moved against you, the position is stopped only for price to reverse back again in the original direction and fly off without you?

Yes, we’ve all experienced that and for most of us more than just once. Some traders see it as a conspiracy, that somehow the market knew exactly where their stop loss was and so the whole market moved just to take their individual position out. Or that somehow it was something their broker managed to do! For most of us though, we accept it as just part of trading and that you simply don’t win them all.

In fact when this situation happens to me, I like to put a positive slant on it and say “well at least my overall directional analysis was correct.” So what can we do to rectify these situations when we are in fact right about direction, but get stopped out on a retracement before it finally flies?

[Download Charlie’s latest report “Trading for a Living” plus claim two free days inside the trading room – click here]

The obvious choice is to assess whether we are placing our stops too close to the market. Are we giving the position enough room to breathe? Some traders, after a series of stop outs like this elect to go to the opposite extreme of having stops too wide which then give them hugely inverted risk to reward profiles (not good) or even worse decide to not use stops whatsoever (even worse). Certainly assessing our stop placement is important and a simple rule of looking at the average trading range and positioning our stops outside of that range can help.

There is another factor we can look at. Time. As mentioned above, we sometimes get into trades, only to get stopped out and then see the market march on without us. Could it simply be that our ‘timing’ is out? I was in a Euro Dollar trade at the beginning of this year which chopped around for a month before it finally broke out in my direction. The direction was right but I could certainly argue my timing wasn’t brilliant as I had to sit on the position for four weeks before it finally started to work for me.

Very often, we all get market direction correct but our time of placing the trade is slightly off. Don’t worry if this happens, as the great Paul Tudor Jones says, “you can always get back in.” Just please make sure you always use stops and don’t think you are too clever because there will always be that time when we are in fact wrong in that analysis. Having a risk cut out point is far more important trying to be ‘right’….


Talking of timing, my personal belief is that I see the case for the Euro Dollar to continue to strengthen towards 1.17. Looking at the weekly chart, you can see where I have marked (red line) a great many failed attempts for the pair to break the 1.14 zone since the early part of 2015. Here we are back at the 1.14 handle again. Does the Euro breakout this time? Does it get rejected once more? The near term noise is something I cannot predict but looking at the bigger picture, I see the potential for more upside to come, it’s simply a matter of time….

Have a great week

Charlie Burton


[Download Charlie’s latest report “Trading for a Living” plus claim two free days inside the trading room – click here]

Be the first to comment on "It’s just a matter of time….."

Leave a comment

Your email address will not be published.



Enjoy this blog? Please spread the word :)