1. Market Noise:
Short-term price fluctuations often result from market "noise" rather than fundamental changes. These random movements can create the impression that the market is moving against your trade immediately after entry.
2. Entry Timing:
Poor entry timing can lead to trades being opened at points where price is more likely to reverse. This may occur if trades are placed while "chasing" the market or relying on lagging indicators.
3. Stop Orders:
Tight stop-loss placements can be vulnerable to regular market fluctuations, leading to early exits and reinforcing the perception that trades often turn against you.
4. Psychological Factors:
Cognitive biases, such as confirmation bias and loss aversion, can amplify the perception of adverse market moves, making losses or unfavorable movements feel more frequent than they are.
5. Market Manipulation:
In some cases, larger players may intentionally create short-term movements to trigger stop-loss orders from retail traders. However, this practice is less prevalent in highly liquid markets.
6. Lack of a Trading Plan:
Without a solid trading plan that includes well-defined risk management and entry/exit strategies, trades can be more vulnerable to adverse price movements.
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