Forex Blog

First-hand Forex trading experience and information about foreign exchange market that will be useful to traders

Archives

Missed Trades — How Do You Treat Them?

July 29, 2013 by

If your currency trading process is not 100% automated (and your EA is up and running 24/7), the chances are that sometimes you miss trading opportunities — whether it is some breakout you failed to notice or a new range market you did not recognize, or a fundamental event you overlooked. Forex traders hate such situations — you spot the trading set-up, but you also realize that it is too late to use it now, meaning that all the time and skills spent on the analysis are wasted.

Basically, there are three ways to deal with those missed trades: ignore, enter late and wait for the price to return to the original entry level. Ignoring the missed entry signal is probably the best thing to do in vast majority of cases — at least you will not lose or risk too much on entering at a wrong level. Entering immediately, even at a worse price, could be a good choice in case the opportunity was really great and entering late would still yield nice risk-to-reward ratio. Entering on a pull-back seems logical — after all, you enter at the price level you intended to, but there are two problems with such solution: first, not all missed trades will offer pull-back for a second chance entry; second, if price has retraced back, perhaps the entry signal was not that good?

Usually, I ignore the trades that I notice after the entry level has already been crossed. In rare cases, I set up limit orders to enter on pull-back. As far as I remember, the only time I entered late was adding more to my long EUR/CHF positions following 1.2 cap announcement by SNB. And how about you?

How do you usually treat missed trading opportunities?

View Results

Loading ... Loading ...

If you want to share some details or ask questions about missed trades and opportunities in Forex, please feel free to reply to this post using the form below.

Leave a Reply

required
required (will not be published)
optional