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Trading Fear #2 - Closing Too Soon or Not Taking Profits

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  • Trading Fear #2 - Closing Too Soon or Not Taking Profits

    This is another common trading error and it's based on several things that are going on in your mindset. First, we are creatures of patterns and we have an innate desire to lock in even bad ones. See other article on “patterns”.

    So, in analyzing your trades, check if you are repeating this error. Where you enter the trade, make a little money, go into fear and close the trade for it to only take off to the target you originally planned.

    Fear, has a tendency to kick in, especially if the market has stalled while you're in the middle of the trade. Just the wait causes the mind to go into fear and reflect on your past experiences of losing in the same situation. The more time you wait the more intense the fear becomes.

    Again, this is a sign that you have a block in your mind if you are not able to hold on till your targets hit.

    Rushing exits comes from specific subconscious thoughts of fear such as:
    "I'm afraid to lose again."
    "I'm afraid to give it back."
    "I'm afraid to lose more money."
    "I'm afraid it won't continue."
    "I'm afraid I'm wrong."
    ...and others.

    Most traders don’t realize this in another “block” that can be removed so trading is freed up and if you’re not ready to get coached, try these solutions first.

    Solutions: 1) First determine was your entry and your target price logical.
    2) Notice your levels of support and resistance to see (if long) you're making higher highs and higher lows, (if short) you're making lower lows and lower highs
    3) Are you in the proper direction of the trade and trend.
    4) You can also examine previous winning trades and notice the average length of time it typically takes to be successful. Use that as a measurement for new trades and if the trade doesn't materialize in that timeframe then you might want to take profits.

    HINT: A good rule is not take a new trade unless you've analyzed the losing trade first and figured out what you need to change. The key is to know specifically your trading behaviors. Great traders know the reality of their trading.

    Again, if you keep repeating these same errors … do consider coaching…. So, you can get your mindset straightened out.

    SPECIAL for April & May: 20% discount off regular pricing. MUST mention AMP Forum. When you call: 702-616-3744. In the meantime, GREAT TRADING!

Disclaimer: There is a risk of loss in trading futures, forex and options. Futures, forex and options trading are not appropriate for all investors. Only risk capital should be used when trading futures. All information is for educational use only and is not investment advice. Past performance is not indicative of future results.

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HYPOTHETICAL PERFORMANCE RESULTS HAVE MANY INHERENT LIMITATIONS, SOME OF WHICH ARE DESCRIBED BELOW. NO REPRESENTATION IS BEING MADE THAT ANY ACCOUNT WILL OR IS LIKELY TO ACHIEVE PROFITS OR LOSSES SIMILAR TO THOSE SHOWN. IN FACT, THERE ARE FREQUENTLY SHARP DIFFERENCES BETWEEN HYPOTHETICAL PERFORMANCE RESULTS AND THE ACTUAL RESULTS SUBSEQUENTLY ACHIEVED BY ANY PARTICULAR TRADING PROGRAM.

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