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You Must Stay Away From This 1 Mistake.
🕑 Added 2023-11-09 19:39:38 +0000 UTCDo not make this mistake.
This mistake has cost people thousands during a time where they could have made millions.
This simple mistake is not spoken enough.
I have fallen victim to this many times.
Even the most aggressive minded traitors have struggled with this in the past.
That my friends is called the "Cost Of Hesitation"
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First let make this clear, this is a natural normal process.
There are some times when you should hesitate and it's a good thing.
For example you're going to cross a busy street you stop and we've all been taught you look to the right you look to the left.
This is good hesitation.
So the next question is what is harmful hesitation?
This my friends can be put in one simple sentence.
"when you chicken out"
What i mean by this is when you've gone through the checklist you've checked off all the things, you've gone to that street you've looked to the right you've looked to the left, and then you chicken out.
At that moment that's stupid hesitation.
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Now we are going to link that with trading.
Why do people hesitate?
One is a reason that everyone is going to experience in their life, and that is 'pain'.
Hesitation comes from pain.
Let me explain.
When you start trading, you're excited, a little bit nervous, but you haven't experienced the pain of a loss.
Once you experience that pain, you get marks in your brain, and they build up.
So, when you come to a similar situation in a trade, you remember that pain, and it causes you to hesitate.
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Another reason why people hesitate is due to 'uncertainty',
Uncertain about taking action during the trade, that's where hesitation occurs.
It's the uncertainty of whether to exit the trade, take profits, cut losses, or make adjustments
The fear of making the wrong decision in the midst of market movements can be paralyzing.
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Now, let me share an example related to the hesitation before a trade.
I know for a fact there has been instances where you've analyzed a trade setup, everything aligns perfectly, signals are there, but there's that moment of uncertainty.
Instead of confidently executing the trade, you find yourself saying, "Well, it's not the absolute best setup I've ever seen," or "What if I'm missing something?"
This kind of hesitation often leads to procrastination.
You delay entering the trade, and by the time you decide to act, the market has already moved in your favor, and you end up chasing the trade.
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Now, let's explore the second phase of hesitation—during the trade.
During a trade there's a constant battle between the fear of losing more and the hope that the market will turn around.
It's a challenging moment that requires decisive action.
However, hesitation during the trade can lead to missed opportunities or increased losses.
Let me give you an example that illustrates hesitation during a trade?
You will relate to this point if you have traded before.
There definitely has been instances where a trade is in the negative, but instead of you cutting your losses according to your predefined plan, you find myself hesitating.
The fear of realizing a loss becomes a mental roadblock, and you end up holding onto the trade longer than you should.
This hesitation often stems from recent experiences of painful losses, creating a mental barrier to executing necessary actions during the trade.
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Now, let's move forward and discuss how traders can work on overcoming hesitation.
Overcoming hesitation is an ongoing process that involves self-awareness, discipline, and continuous improvement.
By addressing the root causes and implementing practical strategies, you can enhance your decision-making and execution in trading.
Because if you do not you will get stuck in trades you should not be in.
Getting stuck in a trade is a common pitfall, and it often arises when you deviate from your original plan.
Let me elaborate on how this can happen.
You enter a position with your clear plan: "I'll enter at a certain price, and if it goes below a specific level, I'll exit to limit my losses."
However you don't follow through with your exit plan and the market moves against you.
The price goes below your predetermined level, but you hesitate to cut their losses.
At this point, they become stuck because the market has invalidated their initial trade idea, and yourre uncertain about what to do next.
This hesitation is often driven by emotional attachment to the trade, fear of realizing a loss, or the hope that the market will eventually turn around.
You find yourself waiting for weeks or even months, hoping the trade will recover, which rarely happens. The longer you stay stuck, the more emotional and psychological toll it takes.
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Now, the key is to avoid getting stuck in the first place.
You can do this by strictly adhering to your trading plan, setting clear stop-loss orders, and being disciplined about cutting losses when the market doesn't validate their initial analysis.
It's about recognizing when a trade isn't going as expected and having the mental fortitude to act swiftly, even if it means accepting a loss.
Now you can see how getting stuck in a trade can lead to missed opportunities.
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So how do you overcome hesitation.
Overcoming hesitation is an ongoing process, and you should view it as an essential aspect of your journey toward becoming more successful the markets.
Here are some way;
- Self-awareness: Recognise patterns of hesitation and understand when and why it occurs. Identify whether it stems from uncertainty, fear of losses, or emotional attachment to trades.
- Stick to the plan: Develop a clear and well-defined trading plan, including entry and exit points. Adhere strictly to this plan, setting stop-loss orders and take-profit levels in advance.
- Risk management: Implement effective risk management practices, such as setting predetermined stop-loss orders. Define the maximum amount of risk you are willing to take on each trade and stick to it.
- Discipline: Avoid deviating from the trading plan, especially when faced with uncertainty or adverse market movements.
- Accept losses: Understand that losses are a natural part of trading. Accepting losses early and moving on to better opportunities is a sign of discipline and can prevent getting stuck in unprofitable trades.
- Emotional detachment: Cultivate emotional detachment from trades. Focus on the overall strategy and avoid becoming overly attached to individual positions.
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Now how do i personally remove hesitation?
What i like to do is to remove the ability to see the current price on the chart.
That's a big one.
Because what you do is you just focus on your levels and you put your orders out there.
If you have a buy limit order at a certain level, it will get filled if the price comes down to that level, regardless of what the current market price is.
So, if you're hesitating to get in, use these automated orders, especially the stop limit orders. It takes the emotion out of the entry. You've already predetermined where you want to get in. Set it and forget it.
Now, let's talk about getting out.
This is where a lot of hesitation happens, especially if you're watching the market. The market is dynamic, and it can make quick moves. If you're watching it, you might second-guess yourself and hesitate.
The best solution for this is to use automated exit orders.
This could be in the form of a stop loss order or a take profit order. Similar to the entry, if you find yourself hesitating to take profits or cut losses, set these orders in advance.
For example, if you're in a trade and you know you want to take profits at a certain level, set a take profit order. If you want to cut your losses at a certain level, set a stop loss order. This way, once the trade is executed, your exit strategy is automated, and you don't have to make emotional decisions in the heat of the moment.
Remember, hesitation often comes from uncertainty and fear, and by automating your entries and exits, you eliminate a significant portion of that emotional struggle.
It's about having a plan, sticking to it, and using technology to assist you in executing that plan without hesitation.
So, to overcome hesitation in trading:
- Use automated orders for entry and exit (especially stop limit orders).
- Remove the ability to see current prices on the chart.
- Focus on predetermined levels and let the orders execute without constant monitoring.
By incorporating these practices, you will significantly reduce your hesitation and trade with more discipline and confidence.
I hope you learned something.
See you at the next post.
@ionicXBT
Comments
Very good content! I struggle in this area & think after this i’m going to try to start automating my exits more often. I think that’ll keep me profitable more consistently. Thanks for sharing!
As always a great read, lesson and teaching. Thanks for sharing, ionic! 🙌🏽
Thank you Ionic, I needed this post!
i'm working so hard on wiping out fear and hesitation, thanks for the tips...respect
