Trading forex: missed my entry
Being a forextrader can ben incredibly rewarding. The joy you feel when a trade hits your target. Or a trade that just missed your stoploss and turned around in the right direction. That is what keeps me going. But frustration is just around the corner. Trading forex: missed my entry to a very promising trade.
Example of a missed forex trade
Let me start with an example of a really frustrating missed trade. This set up has shown a very positive out come and this combined with the right time frame and some of my other criteria, completed my plan for entry. This was a 150 pip trade with a beautiful risk/reward.
As you can see, I had a sell limit in place (the green line) and the price was 7 (!!) pip away from my entry. The trade would have hit it’s take profit about a day later.
And yes, I missed it.
If you open a position or start a trade this is called an entry. My entries are based on a couple of rules that are all in my trading plan.
How to enter a trade
During the day I have a few entries, which means that for example the price and market conditions met my criteria and I am allowed to enter a trade.
Depending on the type of trade you can enter manually or place a sell stop, buystop, sell limit or buy limit.
No matter what kind of entry you have planned, you can miss an entry.
I have missed entries because I was sleeping, because I wasn’t on my computer, because I didn’t see the trade develop or the most frustrating: the price is very very near to my entry but doesn’t make it up there. It happens!
What can I do after missing my forextrade entry?
I have found three options:
Wait for the price to fall back or climb up and enter at the original point
Don’t enter at all, preserve your capital
Enter late: best practices in forex
In your forex trading plan it is wise to have a rule for missed and late entries. This can be a max amount of pips or a Fibonacci level hit (or not yet hit).
Wait for the price to come back down
Sometimes you get lucky and the price will drop back down (or rise back up) to the price level you where waiting for. This does require nerves of steel or a automated entry.
Don’t enter at all
Did you miss a forex trade? So be it! Just let go and on to the next one!
Risk reward improvement
I some cases your trading plan might have a risk reward minimum and a missed entry might just turn out to be a nice possibility!
For example: if you wanted to enter a long trade but missed the entry price and the price went further down, your risk reward just improves.
The conclusion to all this? Missing an entry is not always bad news!