Gold: A Lesson In PATIENCE And PROPER Stop Placement +280 pips

15 thg 10, 2018

Does this sound familiar to you?

You spend hours analyzing the charts. Scouring the internet for clues as to what the market is going to do. After you have done all your homework and convinced yourself that you have a strong enough idea of what is to happen that you feel confident enough to place the trade. You calculate a stop that according to your personal risk tolerance and what you can afford to lose or feel like you would be comfortable losing that you would sleep at night. So you place your trade and go to sleep......then you JUMP out of your bed expecting to see HUNDREDS if not THOUSANDS of dollars in profits sitting in your trading account.......

But then your jaw drops as you see that your trade was stopped out overnight while you slept having hit your stops. You cry. You get frustrated. You get angry. You start thinking AGAIN that the market is out to get you. You lose confidence AGAIN. You lose money AGAIN.

Does that sound familiar to you? I won't even bother to ask IF it has ever happened to you because I KNOW it has. The better question is HOW MANY TIMES has it happened to you?

"The definition of INSANITY is doing the same thing over and over again but expecting different results!"

So will it hurt to do something DIFFERENT? So many amateur traders lose money because they do not know the proper way to place stops. So they get stopped out before the BIG move actually happens. If you only knew how to place PROPER stops, I guarantee that you would at the very least, LOSE MUCH LESS and probably make money! Why do I say PROBABLY? Because of course, just knowing how to place proper stops does not insure that you will have winning trades and FINANLLY start to make money. NO! There are many other things that successful professional traders do and traits they possess that you probably do not. One of the MOST IMPORTANT ones is the ability to be PATIENT and not panic. Sometimes, you have to have the PATIENCE of a saint in order to be successful! So if you are a scalp trader or a swing trader, I'm going to go out on a limb and say you do not possess that skill. But if you are a successful scalp trader and you are happy making a couple of pips here and there, more power to you! This lesson is for those that want to learn how to make HUNDREDS of pips profit from trades and do it without needing to be STUCK in front of the computer screen staring at charts all day and night. If that is what you want...then pay attention!

Take a look at the Gold chart above. What you will see is that I'm up over +280 pips in my Gold trade. That is over $2,700 in profits on just ONE contract. I won't say how many contracts I bought but you get the idea. But you know what? I actually bought Gold WAY TOO SOON! Look again at the chart and you can see that I bought Gold and told my followers to do the same on October 5th! Why? My long term analysis told me that Gold was going to head higher. So I was looking for signs that it was going to break out and on October 5th, price action certainly looked like it was going to break out to the upside. So I issued a BUY signal and bought myself as well. Here is the chart I published to my followers about my analysis that shows that I thought it was about to break out and shows my trade that I issued with the stops placed at 1180.16:

But look what happened after I bought and issued that BUY signal? Gold DROPPED!

This is the nightmare scenario that I described above in the opening, right? I'll bet that looks very familiar to you, right? But you know what? The difference is that I DIDN'T GET STOPPED OUT! So in my mind, I have NOT lost ANYTHING! Remember, you only LOSE money when you're trade is closed whether by stop out or you close it out because of FEAR and PANIC! If you are still in the trade and it goes against you, you HAVE NOT LOST ANYTHING!

You can see that I placed my stops way down BELOW the bottom of that sideways channel that was clear as day. I did that because when I placed the BUY order, I also knew that there was a chance that I was wrong and that it was STILL going to stay in the channel and head down. But I also knew that if this channel was real, then it should not drop below that lows of the channel. So that is where my stops went. It ended up dropping about -180 pips! Which is over $1500 on ONE contract. Would that make you PANIC? Would you have closed out your trade at a loss already? This is where the difference between your average amateur losing trader and the professional successful traders really make the difference! Professional traders will be PATIENT and UNEMOTIONAL (meaning WILL NOT PANIC!) and just stick the the original trading plan and just let the market do its thing. If you trust in your analysis as I did and just was PATIENT, well, you see the result! NO LOSS and now up over +280 pips and $2,700 in gains! Of course, the same thing applies in that this is only paper gains and not actual profits until I actually close the trade and put the money in the bank.