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What is limiting whipsaws? Is there a way of limiting whipsaws?
Trading is either winning or losing. There’s no other option. For many times, this kind of trading situation had happened to me -- I got stopped out by one or two pips; then the trade would favor me and my targets would be hit.
over 2 years ago
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Your best bet is to reevaluate your trading strategy. I think it would be a good idea to create a trading journal so you can check your previous trades, why you got whipsawed and what you can do in the future to avoid it. From what you said, it seems that it has happened many times... Then you could have adjusted your stop loss strategy earlier so you'd end up winning instead of losing all those other times. Also, what some people do is wait for "pull backs" before entering trades. You will miss some trades but you'd be entering trades which have a higher probability of working out. What they do is once technical support and resistance levels are broken, they wait for the "retouch" of the price level before buying/selling the pair.
over 2 years ago
Answers (6)
Maybe, your ‘stop’ for trade is set without your knowledge. Or you may have put your 'stops' strategically. Check out the setting and make sure that 'stops' are put behind resistance or support levels. After having done these steps, the next time you’re stopped out, you’ll be sure that it is not by accident. You’d know by then that your trade idea is wrong.
over 2 years ago
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Entering a trade right before the release of some major market news must be always avoided. Watch the market during these times so you’ll understand what I’m talking about. :)
over 2 years ago
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I agree that settings the stops will just result to your trade getting stopped out by 1 or 2 pips. So I figured out that the market doesn’t really care with or without setting the stop. The latter gave me some assurance though. I know now that my analysis is wrong whenever my stop is hit.
over 2 years ago
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Watch the trend. Enter your trade when trend is bigger. To assess a big trend, look for the higher timeframe. This simple rule will make you pick trade cautiously so you will not lose due to carelessness.
over 2 years ago
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Wider stops are necessary. Stops may even be doubled due to low volatility and range bound trading. Cutting the position sizes into two will create maximum risk for each—but there will be more room for the trade to work. This technique may also limit whipsaws.
over 2 years ago
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You can limit whipsaws by trading on a higher time frame. Trading on a higher time frame means that you have to widen your stop and profit triggers. Though trading on a higher time frame also limits your potential to profit by foregoing the initial spikes in prices.
over 2 years ago
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