You don’t have to worry so much about getting trapped. Because if you enter when it bounce back to the support and you have a very hard stop loss, you just have to note that once you get into a trade you let the trade work itself out. So when you get into a trade, you know where your stop loss is going to be. You know roughly where your profit target is going to be if you decide to have a profit target.

Otherwise, you can use things like trailing stop, which I’m not going to dwell on it right now. So once you have entered a trade, even if it’s just at the support level, you enter the trade, if you have a stop loss, then there’s nothing to get trapped about. The only thing that you can get trapped is potentially just go sideway without touching your stop loss, and it doesn’t go higher.

And I don’t think that is going to take a long time for it to just go nowhere. So you are technically not in a trap because sooner or later it’s going to either hit your stop loss or it’s going to show that hey, the trade is working out for you by it rebounding.

So from a mindset perspective, as long as you enter a trade, you know where your stop loss is going to be, and you be disciplined in following that stop loss, then there’s nothing to worry about you being trapped. There’s nothing about being trapped because you are technically not being trapped as long as you know what you are supposed to do based on your training plan.

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Philip Teo

Founder & CEO at Traderwave Pte Ltd
Philip Teo is an entrepreneur, speaker and trading coach who specialises in the field of Technical Analysis of the financial markets. He is currently the Founder and CEO of Traderwave Pte Ltd, a financial technology company that offers a web charting application to global traders. He has conducted many trading seminars and appeared on national television before. He is also currently an official speaker and trainer with SGX Academy. Learn more about him at his Google+ Profile, LinkedIn Profile and Facebook Profile

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