Never Be Afraid To Change Your Bias
At the time of writing, I’ve had an incredible week. Filled with opportunities and trade setups that would have you questioning whether or not we’ve actually come to the end of the year! I mean, seriously, since when are the markets so volatile in December??
No one can ever tell if the markets are going to be volatile or if we Forex traders will have opportunities to pounce on! No one can tell us what to expect in the closing months of a year, ever! This is because the markets are different each year.
Around this time last year, EURUSD was behaving very differently to now!! Just as you cannot expect the markets to stay the same year to year, you cannot expect them to not change in a moment.
You have to keep your fingers on the pulse and look out for all the possible opportunities that may appear from just that one pair in a single moment!
You may be wondering where on Earth I am going with this rant, which probably has nothing to do with you, right?
Have you ever wanted to change your mind on something but just thought you should stick it through? Or maybe thought that something was going to turn out in your favor because you “saw no other way” for the opposite to occur?
No? Okay, I am going to be honest with you today. Although last week was a great week, there were many opportunities I missed.
Am I happy that I missed the trades? NO! Am I content? YES! Let me tell you why. Those opportunities will come again and I will be better prepared for them the next time around.
Let me show you exactly what happened with one of the trades I was in this week.
(Source – TradingView)
Look at that! At first glance you’re probably saying “Oh wow I wish I caught that entire bearish move” – I do too!
So I had good reasons to enter a buy position but this is where I will be honest with you ladies and gentlemen… I was greedy, I wanted a piece of a pie that wasn’t there.
Unfortunately, this did happen. On top of this, I most definitely should have seen the bearish momentum coming. BUT the most important thing is I have learned from the experience! Remember I spoke about not being afraid to change your bias in the Forex market?
This is why. When you are fixated on one possible move, you begin thinking like a retail trader and forget that the banks are trying to build up liquidity, by picking up the retail trader’s orders (through stop hunts, etc.)
To make matters worse, instead of winning one of the trades, you may end up being stopped out of the position you had and still miss the next opportunity (that is as clear as day).
These are the kind of mistakes to watch out for but more so understand that it’s alright to go against your initial bias as long as you have reasons to back the decision up.
The process to consider changing your trading bias
You need to look at the following to make that decision:
- Does this still fit into my trading plan?
- Can I stay within my risk limits?
- Am I revenge trading or is this a quality setup?
The third is more of a psychological barrier question. In my opinion, it helps you- Stop, take a step back, and think about whether or not you are viewing the market objectively.
If you are indeed emotional, this self-analysis helps take you out of messy space. Because if you realize that you are revenge trading, then you know that you shouldn’t take the trade no matter how profitable it may be.
It does not mean that you are a bad trader if your bias changes. If anything it showcases your alertness to market structure and the events that may occur for you to make that switch.
If you adapt your viewpoint and capitalize on those moves, you will make more money in the long run. Remember it’s a game of probabilities.
You are your own leader and CEO (Chief Execution Officer) in the market and no one can trade for you. So whatever the decision, there will be moments where you want to stick with your original opinion because you see things differently from other traders.
You may have a different viewpoint because of your edge, which is OKAY! OR you want to change your bias and pivot in a different direction because something has occurred in the market, that is OKAY TOO!
It all comes down to self-awareness.
So keep moving and putting your soldiers to war. If you have any questions feel free to reach out to us or join the forum. Let’s connect!
Happy trading fellow Traders!