One of the biggest dilemmas that traders face when trading is what to take into account when opening a trade. Charts? News? Macro data?
Most people go for everything at once, and the truth is that to achieve consistency in trading, although all traders go through the same stages, there are different paths to reach the goal.
The problem with doing what everyone else is doing is that you will either do the same thing or get the same results.
Solution: find your own path, with all that it entails.
Most traders follow news, data, and then cross-reference it with charts to try to determine the best entry point. Not content with this, they usually seek the opinion of other traders online to confirm their decision.
Consulting others' opinions is often quite counterproductive, especially in the sense that they will change for better or worse any personal opinion about the situation. We always tend to think that others know more than we do and that if they think differently, it must be for a reason, and you won't be the one to be right.
Let's see another example of the psychology that exists in the market and the human determination to always follow the crowd, no matter where it goes, whether right or wrong: If it gets it right, great, how smart I am, and if it fails ... at least I wasn't the only one. "Misery loves company."
I believe that to live off trading, the research must start from oneself; it is vital. And this is necessary to refute or not the information with which the market bombards us every minute.
You need very intense training and experience to live off trading. You need to build muscle.
How many traders enter intraday based on the economic calendar? How many win? It's not worth it.
Knowing the multitude of traders that concentrate around the platform at key hours, market makers have traps of all kinds. Their favorite; the sweep. Up, down, and sideways at the same time.
Better mental stop? In my case, no. I don't know how mentally strong you are, but the word says it all: stop-mental. When you expose yourself to let your mind think, you are stepping into dangerous psychological territory, and it is very difficult, if you are in losses, to close with discipline in each and every one of the trades.
Notice that I say in each and every one, because if you do not respect even one and the price does not return to the entry point in that trade, it will be your elimination as a trader.
Therefore, everything that can cause a loss to the trader is worth discarding.
Greed does not let you, we know that when there is a favorable data point for our position, a lot of money can be made, but if the data is against us and even creates a gap, no one can save us. And I'm not even talking about if you are leveraged.
Being leveraged and having the position run against you is one of the toughest experiences a trader can have.
Watching your capital being destroyed at breakneck speed, how losses increase, how you are unable to close because you expect a recovery to do so, is dramatic. Realizing how that first loss, which at first seemed large, no longer seems so significant, and that now you would 'kill' to lose just that.
Once you are losing a lot, you will no longer be able to close. There comes a moment when you accept it and let the losses run as far as they go. You have accepted it. You risk the account in the hope of recovering.
This entails hours of waiting for the desired recovery. Moreover, the market is very tricky. After the fall, a rebound usually occurs, normally up to halfway. You get the idea that it will fully recover, and instead of closing, you hold on to see if there comes a moment when you lose nothing; the market makes you believe that will happen.
You might even average down (add more lots) to bring the recovery forward, and if the price reaches where you opened the first trade, you could exit with profits. But, as I say, the market is very cruel, and when you start dreaming again, hoping, it turns around and falls even harder, crushing your account and your spirit.
We all know the outcome. If the account does not have enough capital to withstand the bleeding, margin call will pay us a visit. And if it does, it will take you days, weeks, months, or even years to recover your capital, if you do. Days, weeks, months, and even years without liquidity to do what you love most, trading.
In light of this, the stoploss, as well as moving away from any situation that makes you lose, is more than justified.
And what I was getting at, if trading based on intraday macro data (economic calendar) means buying almost all the tickets to lose, the solution is to close all trades before the data is released. (I've been doing that for a while now).