I will only trade when I have well back tested signal, in stocks I need sample size of 20,000 per signal, I want to know everything possible that I can, I trade all days now, but some signals negate trades based on bot buying into resistance or selling short into support, longer the term of signals whether trend lines, Head & Shoulders, Failed Bollingers, Triples/Quads or Double extremes, Triangles or Megaphones, Ascending/Descending Triangles, none of these chart patterns do I trade against, that doesn't mean others won't be profitable trading around them, but they often will not have low enough losing percentages for my style of trading. I feel too many are trading these patterns because they are patterns, Pros will mess with those who are trading them where they might be and the whipsawing I don't want to be part of that. I will be watching for failures as they are some of the better trades as the weak hands are messed up mentally but that not to say the failures will work every time, but they have high enough percentage I will look for them. I trade Fed days but will pull day trades only and if I recently got in Financials or Indexes, might put on extra options for hedges but not very often. I don't believe in concepts of too high/low, when it hits zero it is too low, and I have worked with indicators starting late 70s of what was available, unless you have studied and gone over years of weekly/daily charts, indicators that make extreme highs/lows are funny, price travelling too fast will make many indicators simply don't work, they usually indicate normal price well but when price becomes abnormal fast, it is going to take indicator less reliable till normal price is happening again. Traders don't realize you have to use both the price and indicator together to have good insight in what price is showing and not just the indicator. The indicator is to help make decisions if one knows what price should be doing, but I have to laugh when so many rely on the indicator so much without knowing why the indicator made that pattern. And so many rely on just doing programming and do so little actual studying the charts. But hey, less they know, better for me. Have to have good rules on where to start trendlines and how to gauge when to not use steep trend lines, lot's of practice cause until you do yourself, it doesn't work as well being telling anyone, you have chart too spread out will give one angle and too bunch in will make it steeper. All right Ice Road Truckers Extreme .
Don't trade whenever there are high impact events coming out. I have the habit of checking a Forex calendar at the beginning of every week, and if I see that on certain day there's a major event, like a FED announcement or the NFP I don't trade. Or at the very least I don't trade the currency pairs affected by that event.
YES I 100% agree. No trade is better than a bad trade. If the trade doesn't feel right, don't take it and move on from there.
That is a lesson that took me forever to learn. When you're sitting in front of the charts the urge to trade sometimes can be overwhelming.