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Wouldn't some big players trade against you if you post
your trade plans in the open?
There are more than one answer to this question. In
theory, yes, other people will and should use our trade
plans against us, making their money at our expense. In
practice, however, there are a lot more information that
has to be assured before anyone may have a chance to
jerk us around. For example, for everyone who plan to
trade against us, there may be one or two or ten others
trading with us, hence making it a bit more challenging
for anyone to take upon a shadow competitor like us.
That said, during so-called "thin market," few
individuals have been reported to cause sizable price
fluctuation, much like the ripples caused by a stone
dropped in a moonless lake. As such, we do have experienced on
increasingly regular basis
"innocent" cut-losses, in which the market travels
just enough to force us out of positions before swinging
back our way again without us in the market to catch
any of it. Most of our losses in 2002-3 were of this type.
As much as we do not believe it, we as human beings do
naturally wonder about its apparent consistency. As a
technician, we have yet to be convinced of it. The
market is too big an ocean yet to pick on us Nemos.
What do I do if my trade
plan is generally sound, but the market goes just enough
to trigger my stop-loss before going my way the entire
way to profit target?
This question is directly related to the one above. And
the answer is sufficiently given in the excerpt from our
email back to a viewer: "You
have asked a question that all traders must have
wrestled with at least one time in their career. It is
a good question that may have many "good" answers to
it. However, our experience as well as those of many
others have taught us that any way of trading (chasing
the market or waiting for the next trade) carries a
factor of risk and reward. It is mixing of the many ways
of trading that would get one killed sooner than soon.
One needs to decide before hand whether he or she trades
by sniffing the wind of market mood, or by following
seemingly robotic discipline, and then pick and choose
one as his or her trading strategy, and sticks to it.
We have learned to prefer the latter; namely, the
strategy of "planning a trade and trading a plan." The
market never ends, it comes around and around; hence,
there will be endless opportunities for you to go in and
fetch riches. If the price action kicks your position
out and then still turns to go your way, the most you
probably should gain from the loss is the lesson learned
on how to time your next entry and stop-loss better. It
is far better to move on to plan your next trade than to
dwell on a losing trade and your own emotion to get it
back right away.".
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