How to stop missing trades you decided not to enter

Sep 5, 2022

Level: Beginner

Reading time: 4 min

If you’ve been trading for a while now, you’ve almost definitely missed a trade because you doubted your idea, only for your plan to be correct and price take off without you. It can be immensely frustrating, especially if your target would’ve been hit with a hefty profit.

In this article, we’ll give you three actionable tips on how you can stop missing these trades and be more sure of yourself.

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Stick to your plan

Usually, the process for entering a trade goes like this: you identify something that leads you to believe that price will either rise or fall, and you define your entry criteria, like price reaching a certain point or closing outside of a range, for example.

However, after forming an idea, many traders will then watch price action and are on the lookout for every reason why they shouldn’t enter the trade, especially on lower timeframes. This is taught as prudent risk management, but it’s really the opposite: it’s just trading on emotion.

While you should have points that would clearly invalidate your idea, disregarding your overall plan because of some minor price action is counterproductive, as often, conflicting price action is designed to shake emotional traders out of their trades.

Instead, if you stick to your plan and determine what exactly would invalidate your setup, you’ll stop missing trades based on your fear of being wrong because of what you (incorrectly) perceive.

Ignore opinions

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Closely related to sticking to your plan is convincing yourself your idea is wrong because someone else says so. That’s not to say arrogantly believe you’re right all the time, but generally, seeking out opinions from random Twitter users or even self-professed pro traders will just confuse you and cause you to doubt your trade idea.

In trading, seeking objective truth is valuable, but subjective opinions usually aren’t. Suppose you see someone with a completely different style of trading posting why x will plummet (a subjective opinion) instead of pointing out a trend (an objective truth). In that case, your safest bet is to ignore it and use your own methodology to guide your trades.

Don’t look for too much confirmation

Looking for confirmation is always a valuable tool to help increase your win rate. But, there is such a thing as too much confirmation. This is a typical mistake newbie traders make; fear of being wrong causes them to seek numerous sources of confirmation, resulting in either being too late to take a trade or being confused by conflicting answers.

This often applies to new traders because they employ a range of indicators they don’t really need, as that’s what they see everyone else doing and are convinced that more information = more insight into the markets. This is an ineffective strategy as indicators are usually lagging, meaning their signals are given retrospectively.

Think about a moving average, for example. If you wait for a confirmation from a moving average crossover, you’ll end up entering trades very late as a 50-period average will cross a 200-period average after many of the best entries are gone. This makes it very difficult to find a decent entry that would give you a good risk:reward.

Additionally, if you slap five indicators on a chart and wait for all five to give confirmation, you’ll be waiting a very long time. Even if you wait for two of those indicators to show confirmation, the others will likely give conflicting information.

Instead, define your most important confirmations based on price action and maybe use one or two indicators for confluence. Don’t let them keep you out of trades or be the only reason you enter them.

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