Obviously you can’t win if you don’t buy a ticket, and at times….these tickets can cost you a pretty penny may it be psychologically, financially or both.
So when things are trading sideways ( as with the example of EUR/USD for example ) how long does a trader choose to hang on before considering the trade a wash / scratch or even a loss?
It’s always up to the individual, as no two traders have the same “threshold for pain”, each with their own set of rules / factors influencing their decision-making but ideally…the decision is made “sooner than later” – as there will always be another opportunity.
One particular “dynamic of price action” I like to use ( in order to help with this decision-making process ) is what I call the “fourth time’s a charm”.
When any asset price has tested an area of support or resistance for a fourth consecutive time over a span of perhaps a few days – it’s time to take note – as the next move is likely going to be the one that counts.
Breakout or breakdown, one can usually “make it or break it” on the fourth time an area of support or resistance is tested, suggesting that the asset has “done all it can” to either push through the area of resistance overhead or succumb to the pressure, finally falling through support below.
And so we find ourselves in the case of the U.S Dollar vs a number of currencies, currently testing the “fourth time’s a charm”- not to mention both our patience and our discipline.
Which way does she go from here?
The fourth time’s a charm so…….we’ll just have to let mother market decide.
Are you saying it’s time to get out of your EURUSD long? In this case, it’s 5th time testing 1.334s in the last 6 days… today it should have bounced but faded hard. Only a string of stronger than expected EU data may save this pair.
I’m good here for another day er two as…..we’re only a couple pips lower than entry.
As well consider GBP vs USD….now as oversold as it’s been for more than a year!
The Pound isn’t going anywhere as….London’s Central Banking Cartel more or less run the planet.
Another day ( as Thursday is the day Forex markets move anyway ) certainly won’t hurt.