4 Signs A Trade Is Going To Be Bad
The desire of every trader, of course, gets profit from every trade he/she does. However, not all trades will result in profit. There are times when prices do not move as desired and finally losing money. Actually there are certain signs that indicate that the trading we are doing is in a wrong position and has the potential to end up losing. If you can look at these signs we can close positions early and avoid greater losses.
Here are 4 signs that a trade is going to be bad:
1. AFTER SOME TIME, THE PRICE DOES NOT MOVE TO DESIRED DIRECTION
Suppose you open a trading position, but after a long wait, the price does not move in the desired direction. Prices that are not moving or relatively flat, are usually indications of a trend that comes to an end. If this happens, you can consider closing a position, and just enter the market again if a new trend is formed
2. PRICE REVERSES AND NOT ABLE TO RETURN TO CERTAIN LEVELS
After opening a trading position, the price then reverses and is unable to return to the previous high or low. This means that the trend is not strong enough to continue the rally. If this happens, it is usually an indication that the current trend sooner or later will end, it could be a sign that the new trend is brewing.
3. SWOLLEN LOSSES
Swollen losses are usually a sign of a wrong trading position. This means that prices do not move according to expectations and even going to the opposite direction. If you only lose a little, it's still understandable, but if the loss gets bigger, chances are you are in the wrong side of trading.
4. WANT TO ADD LOSING POSITION AGAIN AND AGAIN
In addition to the number 3 sign, trader usually want to add to losing position again and again. This happened because of the Trading Psychology factor. Don't do this, because adding to losing position is a mistake. Remember this: Losers average losers. Losers are traders who continue to add to a losing trading position. The more you add to the loss position, the greater the loss will usually be and eventually blew up your trading account.
If you find these four signs, you may be in the wrong side of the trade. Although not always true, but these four signs are usually an indication that your trade is going to be bad and need to consider closing the trading position earlier.
Hope this article inspires