Trading psychology: patience always pays off

Trading psychology: patience always pays off 300 169 Minimalist Trading – Best Trading Indicators for TradingView

Trading psychology: patience always pays off

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Introduction

Today we’re looking at another trading setup using our technical indicators, which are considered to be among the best indicators for TradingView. In particular, we’re using the Bottoms Tops Signal in combination with the Levels and Zones, and the RSI Exhaustion.

The technical setup is very clear and simple: we have a first impulsive movement followed by a retracement with the RSI Exhaustion perfectly moving along with the price. We then just got a bottom, with the RSI being exhausted so we can set our trade setup and execute the easy forex strategy that we use in these cases, so we expect an uptrend, at least about the same length of the last impulsive movement to the upside.

Trade setup – 8 Jan 2020

Trading psychology patience always pays off Setup 1

The setup on today’s TradingView chart is very clear and we traded is many times in the past.

The three conditions that we always check in this case and which are verified here are:

    1. Two bottoms with the most recent being the highest
    2. The RSI Exhaustion moving higher, just like the price
    3. The RSI Exhaustion being bearish exhausted (colored red)

All three conditions are met and so we have a very high probability setup.

The only concerning thing that emerges from our chart analysis is that the Levels and Zones indicates a major resistance about halfway into our target, which is at the end of the projection to the upside of the first impulse.

Trade update – 8 Jan 2020

Trading psychology patience always pays off Setup 2

The price moved higher rapidly and already broke the resistance to the upside, thus turning it into a support.

This allowed us to move the stop loss to breakeven and so, now, we are in a risk-free trade.

Trade update – 9 Jan 2020

Trading psychology patience always pays off Setup 3

The trade setup got compromised since we now have a sell setup.

The double top and the decreasing RSI Exhaustion suggest that the price might move lower from the current level.

We have three options here:

    1. Close the trade and take the profit (very safe)
    2. Close the trade, take the profit and open a short trade (very aggressive, since we are above a major support)
    3. Keep the trade open but trading it safely

We choose the last option for a few reasons.

First of all, because our initial setup was excellent and we know from past experience that, once a similar setup appears, the chances that it eventually reaches the target are very high.

Second, because as explained above, the price is now trading above a major support which should put a lot of upward pressure. In this regard, it should help us reach the target or, at least, it will prevent the price from falling lower.

Lastly, because we are already at breakeven so, in the worst-case scenario, we will not lose any money!

Trade update – 9 Jan 2020

Trading psychology patience always pays off Setup 4

The price has moved all the way down to the support level but, as expected, it is preventing it from falling lower.

Trade update – 10 Jan 2020

Trading psychology patience always pays off Setup 5

We just got another short setup just like the one that we had before, but this is weaker.

The support that helped us before, should help us once again should the price want to go down again.

We’re just wondering how many beginner traders are getting frustrated by this long trade.

What we do here, instead, is that we avoid getting emotional and stick to the technical evidence.

The price formed some concerning short configurations but, so far, they are failing to move the price significantly lower, hence, we should ultimately reach the target.

Trade closed – 10 Jan 2020

Trading psychology patience always pays off Setup 6

And we got our 4x profit by reaching the target.

How amazing is that?

It’s incredible to see how patience always pays off.

If you want to learn how to read forex and how to make money on foreign exchange, then this trade was definitely for you. Why? Because the initial setup and the technical analysis that we made on the forex chart was absolutely perfect, and our easy forex strategy worked perfectly as well. However, as a novice trader, you could have well messed up this trade, because it required high skills in trading psychology and the biggest lesson that we can learn here is that patience always pays off! In this case, it was a 4x pay off.