Power Of Desperate Traders

[Tobi]

It’s very hard to see your position on the wrong side of the market and the execution of your stop not only saves your account, but feed the account of others who understand how those who are trapped in a losing position are going to react.

It’s only logic to think that a trader in a losing position will exit at moment the paper losses evaporate and they are able to exit at or close to break-even.

Standard technical analysis always tells traders to place stops around the pivot areas or just above support/resistance in a range. How can you tell traders do that?

Look around your charts and on every time frame, you will see price enter a zone beyond the traditional stop zones and suddenly reverse.

 

[gwolf666]

It's understandable that many traders struggle to accept that they're in the wrong market position. Stop management is a crucial tool that can not only save an individual account but also influence market behavior and other traders trapped in losses. Logic dictates that losing traders will attempt to exit when their losses narrow or equal their initial investment, which can create price reversals. Traditional technical analysis methodology recommends placing stops near pivot areas or support and resistance levels, but market reality shows that prices often delve into zones beyond these levels before reversing. This reveals that the market is more complex and less predictable than basic rules suggest. The key is to understand these movements and adapt strategies accordingly, always with discipline and risk management.