What entices short term stock and futures traders to enter a position? The belief that price will move in their favor at some point and they can take a profit. Most traders enter a position believing that price won’t move too far against them before it moves in their favor. Logically, if you thought you could get a better price on entry, you would wait for that better price. Traders who manage their risk tightly will take a loss when the price movement they expect fails to happen and price instead breaks a key level that skews their acceptable risk/reward ratio on the trade.
October 5, 2022
Archives March 1, 2007