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What to do when the trend is directed against you?

Trading

4 min read

We all know the feeling you get when the market turns against you and you have nothing left to do but watch your position slowly deteriorate. Without a doubt it is something that nobody wishes. However, every trader will have to face this problem sooner or later. Losing a share of its operations is absolutely normal, even the most experienced traders do not win in 100% of cases. It is however important to address the issue in the correct way in order to better manage risks and losses. We report three different ways to address this question.

1. Relaxation

It might seem obvious, but it's the first thing you need when the trend begins to turn against you. No matter how many times you have been told "freed from emotionality", you will never be able to benefit from this approach until you are able to do so definitively. Joining the trading strategy and keeping your blood cold will increase your chances of success.

When you witness a sudden reversal of the trend, avoid making decisions in the wake of emotionality. On the contrary, you must remain focused and continue trading as required by your trading system.

A fun fact: some traders use meditation to get rid of anxiety and clear the mind.

Not necessarily you will have to do it too, and it is not necessarily necessarily useful. However, it is important to abandon some dangerous psychological models and maintain control over emotions.

2. Use stop loss levels

You may have already heard that moving the stop loss limit once the transaction was opened is bad practice in trading. In fact, it generally is, since it is related to emotional trading. You can always introduce a rule in your trading strategy, so if the asset price breaks through a major support or resistance zone you can adjust the stop loss level. In this way you can manage the risk with the help of the extended stop loss and take profit features, available to IQ Option customers, while avoiding the pitfalls of the "improvised" management of your trading.

3. Close the position

There is always the option to close the operation. Do not be afraid to close an operation when your trading system tells you. Unfortunately there is nothing you can do to control the market (unless you are George Soros) and some operations will be lost. As long as you do not start losing more than you win, you can feel comfortable. This option is especially good when you feel that emotions are taking over and you can not overcome anxiety.

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This article does not represent an investment advice. Any reference to past movements or price levels is informative and based on external analyzes, we do not provide any guarantee that such movements or levels may reoccur in the future. In accordance with the requirements set by the European Securities and Markets Authority (ESMA), trading with binary and digital options is only available to customers categorized as professional clients.

GENERAL INFORMATION ON RISKS:

CFDs are complex instruments and carry the high risk of losing money quickly due to the leverage effect. 76% of retail investor accounts lose money when trading with CFD through this provider. You should make sure you understand how CFDs work and if you can afford to take the high risk of losing your money.


Source: IQOption blog 2018-11-12 11:21:23

PLEASE NOTE: The articles on this website are not an investment advice. Any references to historical price movements or levels is informational and based on external analysis and we do not warranty that any such movements or levels are likely to reoccur in the future.

In accordance with the requirements set by the European Securities and Markets Authority (ESMA), trading with binary and digital options is only available to customers categorized as professional clients.

Some of the links on this page may be an affiliate links. This means if you click on the link and purchase the item, I will receive an affiliate commission.

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HIGH RISK INVESTMENT WARNING:

This website is not intended for viewers from EEA countries. Binary options are not promoted or sold to retail EEA traders.

General risk warning: CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 73% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.

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