In today forex faq, we will be going through a question that I think most of you are having in mind and we have a fellow trader who ask it on behalf of those of you who are still new to trading.
Below is the question:
After making a trade how long after will I know if the trade is good or not? meaning trading 1h time frame but after 5hours (meaning 5 candlesticks right?) i’m losing by 10 pips?
In fact, there is no way you can know if the trade is good or not until it stopped you out. I do not believe in the period of trade as a way to know whether the trade is going well. Something the price may just move in range for sometime before it goes in your direction or against you. Therefore using a specific number of candles is not a good way to gauge the performance of your trade.
If you have read my blog post, you will have know that I emphasize the importance of setting a stop loss and a target profit for every trade that I made. For me, I simply switch off the computer after I enter my trade and let it run either to my stop loss or my target profit.
That is why you must have a trading strategy that is tested by yourself in the demo account. With a strategy that you have confidence in, you will be able to walk away from your computer after you have placed your trade. I know of some traders who will sit in front of the computer looking at the chart and to me trading is just another 9 to 5 job.
The whole thing about trading for a living is to be able to do whatever thing that you love and have the freedom to do it. Being glued to your computer isn’t the right choice.