Perfection and trading dont mix. There is no perfection in trading. Perfect entries, perfect exits and perfect setups may exist, but that shouldn’t be your goal. Your ability to perform as a trader can be directly linked to just how imperfect your entries and exits are. The trader waiting on the perfect entry may never get the chance to take an exit. This week one of my students was waiting on the perfect entry and missed a good trade. I took the trade and was paid promptly after entry. When I asked him why he failed to take the entry his first words were I thought it would go lower. The trade level we had identified as a high probability entry was fading the selling.
Plan for variance. My entries wont be perfect. Make this part of the strategy. I did this. My student failed to do this. In high volatility, the probability of the perfect entry is greatly diminished. Its about planning for pain after entry so that its accepted pain. It is just part of the trade. I entered knowing this. I planned for this. I executed the strategy and didnt bail out due to it being in an uncomfortable spot. I have done my work, I know my edge and I can be confident when others may be uncomfortable. This is where my student still has some work to do. He knows the strategy, he actually is even confident in the strategy but he needs to step up and execute. When you can find comfort in entries where others find discomfort you are probably finding edge.
Very interesting article and timely. I am confident in my strategy but suffer a lot with no fills. In my weekly review, I coming around to thinking that my approach to my no fill problem is more to do with looking for the perfect entry as close to where I am wrong as possible. But the problem is I end up not in the trade and these frustrations build up over a period of time and I end up taking a lower probability trade.
There is some excellent advice, and I am going to be looking at ways for me to include this within my strategy. More wiggle room and an expectation that the price could trade deeper into the level.
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