Imagine this scenario: The December crude market is rising quickly. You want to BUY the market, but you don’t think the crude will pull back to your support price, which is sixty points lower. What do you do? You buy the contract at the market, so you don’t miss this “winning” opportunity! Now that you are filled, the market begins to stall! You expect the uptrend to start again, but instead a pullback begins and a rapid decline ensues. You are now in a $1,000 losing position, so you get out quickly with a loss! You’re upset that you traded impulsively, as you didn’t wait for your original entry point. (Furthermore, you didn’t even notice that the crude price has started to move up rapidly again!)
So, you missed the REAL entry point and possible winning trade. SECRET #1: EVERY trade should have a strategy before you initiate it. You should know where to enter, where to exit with a profit, and how much you are intending to risk. To prevent the same scenario from occurring again, you need to employ SECRET #2: PATIENCE! Impatient traders create unnecessary losses, wasted emotional energy, and additional stress for themselves. All of these factors then cause you to miss the valid signals you were suppose to trade…win or lose!