You should stop trading. Why so?
Sometimes you have to make a decision not to open a position or even have to close a position when the conditions are not stable. To decide when the right time to stop trading, we can at least identify these two big things as a basis.
Let’s see why you should stop trading:
Matters Related to Personal Life
When there is an interference from your surroundings
Try to look back on how your daily life goes. There are situations where the source from outside you can be a stumbling block to your trading activities. For example, you analyze an opportunity that arises. Not yet reached your open position, suddenly your pet makes noise. This is troublesome which makes the mind chaotic and unfocused.
When your emotions are turbulent.
You must often feel a variety of things related to emotional turmoil, right? This can reduce your focus. For example, when you are flowering after going out with your new boyfriend, you can easily forget your daily homework.
Or maybe you are in mourning after your pet’s pet died. You may also be in a temper tantrum because your subordinates did not complete the job according to the order. Well, it seems that the things above are just trivial. But, it would be better if you pay attention to these trivial things. Do not let this become the reason for the loss position that you get.
Matters Related to Market Conditions.
When price movements appear out of the ordinary.
If we are used to observing, analyzing a pair, chances are that we will be familiar with the “pair” character. When he moves slowly or when the speed accelerates, surely we can predict. Especially when related to news that has been scheduled, the clearer the pattern we understand.
According to Investopedia, if an ineffective trading plan shows much greater losses than anticipated in historical testing, you should stop your trading.
Well, now what we will mark from the patterns that have been formed is a phenomenon that arises between these fixed patterns. If the phenomenon appears close to the pair the period is accelerating (close to the scheduled news), it is rather difficult too. But if it appears when the movement is calm without scheduled news it could be that the price movement is chaotic. Up and down repeatedly in a certain “time frame”. If such a phenomenon arises before we open a position, you should cancel that intention.
Read more: Keeping Trading Journal, Can You?