There is an element of luck in all things we do, whether it’s trading, playing sport, skating or climbing to the top of Mt Everest (although that is an extreme). The extremes are things we don’t mess with when trading. Oh, we can be heroes or heroines and try for that big move, but in many cases, the trader who is satisfied with smaller gains and therefore smaller risk, is often more ‘lucky’ than those who are after the significantly bigger moves.
Luck really comes in to play when you figure out which method of trading suits your trading style best. You become even luckier if you find Harmonic Pattern Trading before you blow your account on other methods that aren’t easily understood. Many of the indicators that criss-cross charts often make a confusing conglomerate of lines that make it difficult to define where a good place is to enter a trade and where to put a stop that still holds a reasonably small risk.
Harmonic patterns, once you can identify them (and this is through FXGroundworks.com) become very easy to see and to learn. They give the trader a really good look at the pattern points, including where to enter the trade with the highest probability of a reversal, and where to exit the trades for a profit.
There is little point in trading one minute or five minute charts when using Harmonic Patterns. The brokers’ spreads will often take the trade out of the equation quite quickly and so it becomes a losing trade on your account. The lowest time frame to trade with harmonic patterns should be the fifteen minute chart and then the volatility of this time frame is often enough to give one a heart attack during news of other high profile events. It must be said though, that often 15 minute charts will get the trader into a longer term trade, as long as it isn’t placed during high volatility.
The daily time frame often involves quite wide stop placements. While not all pairs move hundreds of pips in a day, it is still imperative to stick to your trading plan and not exceed your risk quota, while at the same time finding a logical place for your stops. Therefore it seems that the thirty minute through to the four-hour time frames seem to be reasonable time frames to trade.
But back to being ‘lucky’. The key to succeeding as traders is more than just luck, although there is a little bit of good fortune in every winning trade we take. It’s learning to keep a level head, learning to manage your emotions so that you don’t get caught up in any one trade or in large losing trades. One of the hardest things to master is keeping your risk to a minimum and letting your winning trades have their heads. That’s not luck; that’s good trade management. If we learn that properly, we can categorically say we’re lucky
In all my years of trading I find that my trading style is the thing that helps make me lucky, and my trading plan. Thanks – timely reminder to appreciate our luck too
I have to say I’ve been lucky sometimes but keeping your head when the trade is volatile is pretty hard to do so I think luck plays a part but hard work and money management is the main factors