Hello and welcome to another edition of The bulls versus the bears. In my last post Should I use One Hour and Four Hour Time Frames To Confirm Daily Signals, I touched on a subsection which I simply titled ‘Second Crack at Missed Signals.’ And basically I said it was possible to get back on a trade you missed out on by using the one hour and 4 hour time frames. Well today we are going to go one step further. We are going to learn how to get a second crack at missed trading signals. We are going to through step by step the process of getting back on board on a missing trade. So if you haven’t read the above post, I strongly suggest you do that as soon as possible before tackling today’s post. Or else you’ll be gnashing your teeth in frustration.
Then again if you’re not sure about confirming signals I suggest you look up Price Confirmation Signals:How To Weed The Chaff From The Good . Once you get a grasp of what identifying trading signals are all about, you then read the above post. And when you’re done reading the above post,you come on down and join us on today’s post.
What we are going to learn today basically is get back on the saddle and get after the trade signal that you missed. You want to get back on track and move with the market that you missed out on. However, you don’t want to go on a wild goose chasing after the market.That will be very detrimental to your sanity.
Also,we are going to learn how to make an entry while the initial trade signal is live and loaded like a shot gun. The good news is that you get a second bite of the cherry when you miss out on a trading signal.You dont need to panic-just regroup and re-enter the market. So we’ll look at three scenarios of missing out on a trading signal and for each of those examples, I’ll show you how to get back on the market. And by the way I’ll be using price action signal and trading signal interchangeably. They both mean the same. So there is no need to pull your hair over that.
So the first scenario is
Price Action Signal Pops up Like A Flash
Let’s say you have a pin bar setup on your price chart. All of a sudden a price action signal pops up on the price chart like ‘Jumping Jack Flash’ without you looking. Before you know it the price signal has already closed and you ‘re like”How did I miss that?” Immediately your first instinct is “Let me jump right back into the market.” BAD IDEA! The question you should be asking is
How Do I Get Back On The Trade?
Very Simple. Wait for a pullback. Wait for the price to pull back or gravitate towards a moving average or horizontal level of support or resistance in the market. Once you have either of these two scenarios, you then make your re-entry. Now if the pin bar turns bullish, and the price is above the low of the pin bar,and the price retraces towards the pin bar, you can make entry during either of these scenarios. Let’s take a look at a pin bar setup using the EUR/USD pair.
We see buy signals at the bottom of the bullish pin bar setup. Now just in case those signals pass you by you can always get a second bite of the cherry at the level of resistance. You don’t need to jump straight back in,just keep watch like a hawk the next time the signal pops up again.
Next up is
Missing Out on Trading Signals At Key Support and Resistance Levels
Sometimes a move develops at a support or resistance level. Suddenly price ricochets off a level, and you miss that bounce. All of a sudden you start panicking, thinking ” I may never get this opportunity again.” Look scratch that! You won’t gain anything from stressing over spilt milk. The question you should be asking yourself is
How Do I Get That Bounce Back?
Wait for the market to pull back. And when the market does pull back, you make your grand entry. Strong moves starting near key levels are usually valid until price closes out on the opposite side. Let’s look at another example using the graphic below.
The first BULLISH bounce at the line of support kicks of the bullish trend. And it also provides a solid trade signal which you should be able to grab. But in case you fall asleep at the wheel and miss it, DON’T PANIC. As you can see there are second and third bounces showing along the same line of support. All you have to do is to lay in wait for the signal to pop u on your screen and then make your entry.
Missing Out Signal On Trends Established Weeks Or Months Earlier
Lastly a least common scenario of missing on a signal is that of trends that have been established several weeks, maybe months earlier. In fact this scenario unfolds way before you decide to pull up your price chart.You don’t need to sweat over this because it’s very rare. Think of this setup as forex trading’s versionWhy? because you may see it once every couple of blue moons.
Just like the other scenarios, you ask this question
How Do I Catch This Rare Wave?
Just wait for the price to pull back to a moving average or a temporary key level. Once price hits either of these key areas, hop on the wave and enjoy the ride. Let’s look at this graphic below.
As you can see there are so many re-entry opportunities at the key levels.Just focus your brain cells at these key levels or even moving averages(if you see any) as the market pulls back. If your knowledge about moving averages is a bit rusty or non-existent, look up We Are Moving Averages Part 1 and We Are Moving Averages Part II.
Wondering where to put the stop loss? Just place the stop below the closest key level(support or resistance), moving average or the trade signal. However, you may have to do a little tweaking here.But that’s a small price to pay for a missing out on a hot trading signal earlier.
That’s a wrap for ”How To Get A Second Crack At Missed Trading Signals.” As you can see, it’s possible to get back on board a trade that you missed on and wrack up the profits. Just don’t panic when you miss the boat on a signal. Just take a deep breath, stay focused, and look for another opportunity to make your re-entry. Your patience will surely be rewarded because nine times out of ten, a new signal forms.If you run into a ny problems, just come back to this post and look up the techniques you just learnt.
Next time we’ll ask a simple question:How long do good trades last? You’d well to attend this lecture because it aims to debunk misconceptions some traders have about long trades dragging on till thy kingdom come. Till next time take care.
Looking To Join The Forex Trade Gravy Train?
If you’ve stumbled in here looking to join the forex trade gravy train, here is what you need to do . First, look up Why Forex Trade Is So Popular. Next, you learn the fundamentals of forex trading by reading Forex Trading Basics – Top To Bottom Part I and Forex Trading Basics – Top to Bottom Part II .Next, you need to learn how to read candlestick patterns. They are the main feature of price action analysis. And you need to know what these patterns are telling you. To be able to do that read the following on Fundamentals of Reading Candlestick Patterns, Single Candlestick Patterns, Dual Candlestick Patterns, and Triple Candlestick Patterns . Also You Need To Know Ten Of These Candlestick Patterns . And finally If you want to give your trading skills an edge by relying on pure price action trading/analysis, instead of fancy forex robots and fancy indicators, get started with What is Price Action Trading?
Looking to get a leg up on price action analysis,?you need to learn How to Identify Support and Resistance Levels. And if you want to learn how to interpret trading zones, read up on Identifying Dynamic Support and Resistance Levels. Finally you should know How To Read Candlestick Patterns using Support and Resistance Levels.
However, if you only want to trade once a month and watch your entry rack up huge profits over a stretch of several weeks, consult How to Spot High Probability Trades. And if you are still not sure about price action trading, find out Why Price Action Trading Still Rocks . Dont let me stop you from reading the other posts as well. But the suggested posts above are the most important posts to get you started.
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If you want to know everything there is to know about price action trading Download for free The Ultimate Guide To Price Action Trading by Rayner Teo. This brilliant ebook will change your life. It sure did mine.
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