My losing trades that I entered and closed today consisted of a trade on Oil on the 4 hour chart.
My trade here was to be a reversal above the clear resistance of 7990 and I had an order in to open a trade if 7995 was hit with a stop loss.
The trade did execute over the course of the morning and my order was filled. However, once price hit the 8000 level the price immediately reacted and reversed. Price crashed through my stop loss but as you see it wicked right back up for 2 candles in a row.
Placing a buy order at an amount that is so close to a key round number like 8000 was not a great idea because round numbers can be a problem in trading as they can have emotional affect. Given this fact I should have waited to see how price would react. I have updated my trading rules to reflect the fact that I am not to enter a trade around big round numbers. Further, in the future, if trading around whole numbers I am going to be conscious of the requirement for larger stop loss to cover the volatility. In order to maintain the same financial risk for that time frame I would likely have to reduce position size.
More lessons learned though.
Trade Clearly!
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