With the minutest changes if we get out of trade fearing a trend change then thats it for me. With this tactic we always close in a minor pullback against our direction. And again small profits. Not sure if small profits can take care of small losses (many or few) plus brokerage.
Very few times I have seen market move swiftly in one direction. Mostly it always hangs around in a particular area and then after some time interval moved in my direction or moved against my direction. If you are going to run after the move has been made it becomes like a race for seats in a local train. 1 second late you know you have to stand the journey. And again after the move there will be a halt and back to same process. At some point there is always some kind of forecasting/astrology/calculated risk/predictions/ and chance of loss. The forecasting may be for a 30 min period or for 30 days. Thats what I have felt.
I never used the phrase
react to the minutest changes,i said one must adapt to the minutest changes.
Sideways breakout,sideways breakout is standard process of market movement,and i agree with you that one has to be patient and let their profits run,running profits is key to long term success.
But have have you paid thought to the fact that because market moves 3 step forward and 2 steps back ,it is very easy for anyone to become wishful in their thinking and loose their unbiased attitude in the market.
so what may be an impending sign for reversal,in the form of 2 steps back can easily be regarded as just a normal two steps back.
Consider a trade where you had done a short and market moved 50 points in your favor,and then pulled back,20 points then moved 21 points in your favor again then pulled back 10 then went 10 points in your favor then finally pulled back 20 points to form a small range of 20 points,have you thought this range could actually be a support forming which can destroy all your profits.
Fact is when someone is winning they just close their eyes to all ticks that eat away the profit,when someone is loosing they close their eyes to loosing ticks instead focus on moves in their favor.
When you adapt to market changes you potentially prepare to close your profitable trade for a small profit- (in case market reacted according to the system you trade,by giving signal in the opposite direction).
You not only prepare to close profitable trade for less profit but get ready to trade in the opposite direction.
All things being said the trading system has to be the guide in helping traders make these tough decisions,
That post i made was in response to amandeeps question to DD , it was about listening to the market,and my opinion about listening to the market,and i really feel it is of utmost importance to be a good listener,but only what market wants you to listen,we don't wanna be paranoid in our thought process,neither want to be wishful,in our thinking.
Listening to the market means listening to your system when it signals opposite move to your plan.(provided system works)
Market is like a big city and your trading system is the GPS,but people just throw away their GPS,hell even i throw away the GPS from time to time.
You may yell at the top of your voice that you follow your system 100 percent but as soon as we are in market 30 percent of the time rookies become deaf and blind and stop seeing what market is saying,what their system is saying.We just throw away the GPS and say nahhhh i don't need it
I can handle myself.
It is entirely possible,for us to become wishful in our thinking,and stop listening to market and our system.being adaptable solves this problem.
So i am not saying be a paranoid guy and close your good positions for small profits, i am saying we just trade the position to the potential it has,and
not impose our feelings of what we feel it has the potential for moving.
We follow the system.
We adapt to the change in market conditions.
Then we prepare to decide, to make the tough decision based on our system.
This is as simply as it can be put,their is no two way about it.
Women always complain men,don't listen,because we really don't listen.
But i am trying,and i am getting it right most of the time,as time passes by.
Hope this makes sense.
;-)
