Missed a Trade – What Now ??

Forex-TradeObviously, what ideally you want to do, is catch the calls when they first come out, at the top of every 4-hour bar.  But let’s be honest, sooner or later we’re all going to miss one now and then.  Some more than others . . .  :)

So how do you stick to the trading plan if you missed a call?

Begin by understanding the nature of the FirePips’ calls.  Always, he is calling a buy trade if price reaches up to a certain level, and/or a sell trade if price reaches down to a certain level.  Those types of trades are called “stop” orders on most of the platforms I have ever used.  You use a “buy-stop” or a “sell-stop”.  Some brokers may call it by different names, but what it is is an order to sell at a price lower than the current price, or buy at a price higher than the current price.

It is intended to wait until (or unless) price moves ahead to the trigger point, and only then get in the trade.

So if you miss the call, but see it later, there are three things that can have happened:

  1. Price has not yet reached the entry price given by FirePips.
  2. Price HAS reached the entry price given (and a trade would have been entered), but price has now retraced back behind the entry. A trade that had been entered would now be somewhat in the negative.
  3. Price HAS reached the entry price given (and a trade would have been entered),  and price has continued in the same direction.  A trade that had been entered would now be in profit.
Scenario A:

This one is real easy.  If the entry price that was called by FirePips has not yet been reached, then unless he has already signaled in the next bar to cancel the order, just put in your order(s) exactly like you would have done if you had seen the call on time.

Scenario B:

This one is a lot of fun!  If you see the trade call late and price has already passed the entry point, but has now retraced into negative territory (and has NOT yet reached the price of the stop loss), you now want to get in with a market order.  That is, buy or sell at the current market price.

THIS PART IS IMPORTANT.  You compute the stop loss price and the take profit prices from the entry price called by FirePips. NOT from the entry price that you got when you placed your market order.

  • Example: FirePips called 135.50 for the entry price for a buy trade, with a 45-pip stop loss, and targets of 40-80-120 pips.  When you saw the trade call 2 hours later, price has been as high as 135.65, so you missed the entry; but now price has retraced and is at 135.30.  You then buy immediately at market price.  But you still set your stop loss at 135.05, which is 45 pips from the entry price that was called.  And you still set your first target at 135.90, which is 40 pips from the entry price that was called.  Second target will be 136.30, third will be at 136.70, same as if you had been there on time and traded it normally.  Now if the trade stops out at the levels called, you will only lose 25 pips instead of 45!  And if it hits the first profit target, you will make 60 pips instead of 40!  And so on.

So whenever you see one like this, you get lucky.  If it still turns out to be a loser, you lost less than everyone else.  And if it turns out to be a profit, you make more.

Scenario C:

The third scenario is not hopeless.  Not yet!  If you see the trade call late and price has already passed the entry point, and has now continued into profitable territory, it may seem like you just missed this trade.  That is not yet always the case.   For this situation (if price has NOT yet reached within a few pips of the first target), you want to use what is known with most brokers as a “limit” order.     You use a “buy-limit” or a “sell limit” order.  It’s an order to BUY at a price LOWER than the current price, or SELL at a price HIGHER than the current price.

It is intended to wait until (or unless) price retraces back to the trigger point, and only then get in the trade.

So you put in a limit order to enter the trade at the called price.  In practice, I will sometimes let it be as much as 5 pips worse than the called price, because I don’t want to miss out, and 5 less pips is acceptable.  Whatever price you enter, if the current price retraces back to that price, then you get in the trade at or nearly at what was called.

THIS PART IS IMPORTANT.  Again, you must compute the stop loss price and the take profit prices from the entry price called by FirePips.  Not from the entry price you might get with your limit order.

  • Example: FirePips called a 1.5000 for the entry price for a buy trade, with a 60-pip stop loss, and targets of 50-100-150 pips.  When you saw the trade call 2 hours later you have missed the entry, and price is at 1.5025.  If it has NOT yet reached within about 10-15 pips of the first target (in this case 1.5050), then you put in a  “buy-limit” order for 1.5000 (or as high as up to 1.5005 if you like).   Still set your stop loss at 1.4940, which is 60 pips from the entry price that was called.  And you still set your first target at 1.5050, which is 50 pips from the entry price that was called.  Second target at 1.5100, third at 1.5150.  Now, if price retraces to the entry point, you get in the trade at the same place you could have if you had seen the call on time.  VERY IMPORTANT:  If price reaches the first target before enough retrace, and your entry has not been triggered, then you cancel your “buy-limit” order, and ONLY THEN have you really missed that trade.  But very often you’ll get it, so it’s important to know this method.

And lastly, here is a piece of trading psychology, which as usual I’m going to tell you is more important than the rules of the trade.  Most of all, DON’T beat yourself up about it if you miss one.  Trades are like buses.  If you miss one, another will be along shortly.  Yes it does suck to miss the single highest-profit trade of the week, I know, I’ve done it.  But it also is a blessing sometimes when you miss the worst loser of the week.  I’ve done that too.  Now it’s important you never let that be an excuse to just schlock off your rules and just miss trades.  But as long as you trade with discipline and stick to the plan, you do need to not let it eat you up inside if you miss a trade.

That leads to one of the best things I’ve heard FirePips say:  “Trading should be boring.”   Seriously.  You get that way by doing it with discipline to the best of your ability, learn from a mistake, and just keep moving forward.  No one trade will EVER make you or break you.

Article by Diet Pipsi

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26 Responses to “Missed a Trade – What Now ??”

  1. Andy 17 March 2010 at 11:30 am #

    I am guessing Diet Pipsi wrote it….good one ! It make a lot of sense.

    • Diet Pipsi 17 March 2010 at 5:08 pm #

      It actually got me about 10 more pips just this morning – - I was about 20 minutes late for the 1600 candle, and when I got here, both EURUSD and EURJPY had already passed the trigger price, moved back about -10. So I got in right away, and have about a 10-pips better entry than FP got.

  2. Dinesh 17 March 2010 at 11:37 am #

    Thanks for the details. I am a newcomer to these signals and it seems that I am the only one who is making nothing but losses. Of course, there is the fact that I am still not over the very serious scare of getting into a hole for $47,000.00 over the last 3 years. I moved my SL to breakeven in 3 of the biggest winners and got zilch. I then let 4 of the biggest losers run and got stopped out. All that is me and my stupidity/fear, your signals rock: no two ways about it. Keep up the good work. I just hope that I get a hefty dose of 2 – 3 trades going my way so I can breathe.

    • FirePips 17 March 2010 at 12:36 pm #

      Sorry to hear about your loses. However you are on the right track. You indentified correctly the real source of your loss. Here is what you can do:

      1. When placing a new trade or modifying an old one…ask yourself "how I am feeling? " Identify whether it is Greed / Fear.
      2. Then ask yourself why do you feel that way?
      3. Note the reason and don't repeat to end up in similar situation.

      This reminds me to write an article on this topic…one day I'll get around it :)

  3. lilipeco 17 March 2010 at 11:44 am #

    Muchas gracias por tus comentarios y consejos. Los valoro y voy aprendiendo con cada uno de ellos.

    • FirePips 17 March 2010 at 11:52 pm #

      I guess that's Spanish…No problema mate

      • BBurgos 19 March 2010 at 7:38 pm #

        I can translate for you if you need to, I speak spanish

  4. Betsy 17 March 2010 at 12:20 pm #

    Thank you for the post Firepips. You have answered questions that have been nagging at me since I started trading with your signals.

    I need help with 2 other questions.

    1. What is the best strategy for money management if one's account is not large enough to take all your recommended trades?

    2. I also need instructions in how to place an Order Cancel Order on MT4 charts?
    A friend told me that he places orders and sets alarms. As soon as an alarm goes off for entry in one direction he manually cancels the other. Excellent idea if one is at the computer.

    THANK YOU – it has been a blessing to receive trade recommendations but also the articles which are enlightening.

    • FirePips 17 March 2010 at 12:32 pm #

      Hi Betsy,

      Please note this article is written by Diet Pipsi. All credit goes to him for writing such an informative article.

      1. So far EURUSD and EURJPY has performed the best. I recommend you follow these two if you can't trade all the pairs. An ideal solution would be to move to a broker which supports micro lots which can enable you to trade all pairs.

      2. MT4 doesn't support OCO orders, neither you can create Buy and Sell Pending at the same time due to Hedging restrictions in US. There are some EAs on the blog that can help you. I've personally not tested them so can't promise their performance.

      • Ron 17 March 2010 at 2:29 pm #

        Not to be recommending a broker….But I am on forex.com(Gain Capital)….I am In the US, but they have moved my account to forex.com/uk….I am allowed to put your signals in as Pending Orders, with no problem..

        BTW,,,
        Thanks for the signals & the articles…Best signal site I have found yet.

        Ron

        • FirePips 17 March 2010 at 11:44 pm #

          Ron, that's a good tip. Many brokers have offices in other countries which can help avoid hedging limitation.

          Was the process of moving account straight forward?

          • Ron 9 April 2010 at 3:54 am #

            yes…I did nothing…They handled it seamlessly

  5. Abner 17 March 2010 at 2:35 pm #

    Firepips, I want to first say thank you for doing what you are doing, not only with giving our free alerts and thought provoking stratagy tidbits, but also for how you are encouraging people to support charities and to pay it forward with their knowledge.

    I have just started with following your alerts this morning and will be keeping a close eye on the results. I was last getting your 9am EST signals. What I did was took a look at how the trade was going and saw that neither the buy nor sell signal had been activated so I got in the trade.

    Again, thank you and if you don't know, you are a blessing to thousands of people in the world today. Soon it will be millions.

    • FirePips 17 March 2010 at 11:48 pm #

      Appreciate your comments mate :)

  6. liaueg 17 March 2010 at 5:52 pm #

    Scenario D (Not really a scenario but an option)
    Just forget about this signal.
    Go for the next one :)

    Anyway, Nice Article by Diet Pipsi. My thinking is that once the signal is missed, unless the price had not been triggered, then go for next one. If you miss this one, there will always be another one (Sure you may miss making a few pips if it is a big one, but there will be other chances. Patient is one of the key to trading, IMO)

    • Diet Pipsi 17 March 2010 at 9:11 pm #

      Well I didn't think of calling it Situation D, but you could. I did allude to it at the end, where trades are like buses. Still, my personal attitude is that you should go for every pip you can get that does fit in the rules. Just don't obsess with ones you miss. I do fully agree that patience is paramount in trading.

  7. MMfx 17 March 2010 at 6:09 pm #

    That was a very informative article, thanks,
    I am a very new trader and am still trying out on my virtual account. I am making so much profit I feel like ' I should have traded real money ' :)
    Will do so as soon as I gain more trading confidence in myself.

  8. okey 18 March 2010 at 10:07 am #

    i have been battling to follow your signals. its awesome really because most of the signals achieve their targets. My problem is with these oco trades. how will i resolve it. My broker is fxdd and mt4 does not have oco facility. Please, what is the solution?

    • Diet Pipsi 20 March 2010 at 5:35 am #

      Couple of ways.

      First, the old fashoined way:

      One, is you put an alarm on the platform about 10 pips inside of either trigger. For example, if FP calls OCO Buy at 133.80, Sell at 133.20. You place an alarm at about 133.70 and one at about 133.30. When either alarm goes off, put in the pending order.

      So if the alarm sounds at 133.70, you put in a buystop for 133.80.

      Then put an alarm for about 133.50. If that alarm goes off, then cancel the buystop if it hasn't triggered. If that happens, the put the 133.70 alarm back on.

      Later if the 133.30 alarm sounds, put in a sellstop for 133.20, and then put an alarm for 133.50.

      I have gone back and forth several times before a trade got triggered, but that way you have stop order in for whichever price you are closer to all of the time.

      Cumbersome at best, but it what you have to do.

      THE SECOND WAY IS MUCH BETTER. Go to the downloads link at the top of this page, and download my EA. We are having some issues with the coding for some other brokers, but on FXDD it works perfectly, as that's one of my brokers that I use it on every day.

      Hopefully helpful!

  9. Miro 18 March 2010 at 10:38 am #

    Hello FirePips… :)
    Sorry if it mention before but why you did not open an demo or live MT4 account somewhere and trade signals there?
    Do not know are you have tried gmail but it si for sure best free service and if there are issues may be gmail will resolve they.
    Furthermore there is a nice tool for inter-connecting twitter and MT4 – it is really cheap… So, the MT4 trades will automatically publish on twitter. Then (there is another service) that may send e-mail from twitter … tweetymail.com
    And furthermore – if you give MT4 investor's password everyone will may whenever he wants to see @ trades…
    Just thoughts…

    BEST regards,
    Miro

    • Anthony 19 March 2010 at 3:03 am #

      And which is this tool for Twitter/MT4 ?

    • FirePips 22 March 2010 at 1:40 am #

      Miro, I am working on something that will help answers all your questions. Stay tuned for more updates

  10. tbardolph 18 March 2010 at 10:58 pm #

    here's another scenario I'd like your advice on … I place a pending order, then I miss the update that says: "No Fill, Cancel Order", and as a result the order is filled anyhow because I didn't cancel it … so do I stay in, or bail out?

    • FirePips 22 March 2010 at 1:42 am #

      This one is hard. If this happens then email me and I'll try my best to send you a timely email.

  11. murattt 26 March 2010 at 9:53 am #

    Dear Diet
    is it possible to have your mail? I have an important question to ask you about your beautiful EA.

    Here I am murattt [@] live.it

  12. Vani 8 April 2010 at 4:14 am #

    I'm really thankful to FP as i learn lot here. I an a newcomer, only 1 week old. As a beginner, i loss lot coz i have no money management. After i been introduced to FP, i can easily make small money with good money management. I love trading now coz of FP. Thanks a lot and May God Bless FP and the members.


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