We all love a winning trading system that is capable of telling us (1) when to enter (buy/sell), (2) where the profit targets are, (3) when to cut our loss and (4) when to exit when things are not quite right.

There are several threads in this forum under “News/Signal Trading” that provide forecasts for EURUSD, GBPUSD, etc. They normally give details of Entry Price, Profit Targets, Stop Loss, Resistance and Supports. Some are accompanied with charts and others are without charts. (I love those forecasts that come with charts. A picture is worth more than a thousand words, they say.)

We have traders who love short term plays ie within 30 minutes whilst others are prepared to wait longer - how much longer(?) is another question – 3 hours, 4 hours, 6 hours, the whole day. Who cares as long as they make money.)

Expectations and Reality are two different things ie

Expectations: Whatever methods are used, PROFIT TARGETS are projections of an assumed continuing trend OR retracements (nothing wrong with this thinking). Two questions arise. (1) whether prices will reach the target is another question, and (2) how long/soon will it touch the target – normally this will depend whether the target is 10-20 pips (short term) OR 200 pips or more (longer term) - in my observations of market behaviour, 10-20 pips within 30 min and 200 pips & above – a few hours. (Abnormal/Unexpected events are excepted as these can create sharp movements.) Hope this will give traders an idea of the TRADING TIME required to achieve targets. Forget about holding positions for days as most of us prefer day trading.

Reality: The reality of market behaviour is that prices DO NOT MAKE one smooth ride up or down. Many times prices may not reach their targets and on their way to their targets, in betweens there will be profit-taking, triggering of stop losses.,

General: I asked myself what can I learn from such type of market phenomena. Most forecasts by pros and veteran traders are correct (based on their fundamental and technical analyses); it is the TRADING TIME (unless this is of no essence to some traders) it takes to achieve the targets and the happenings in the in-betweens that disturb our mind.

What can we do to take advantage of both short term and mid-term gains. Enter 2 lots, closing the first lot when you make 10-20 pips and the remaining order to let prices run its full course for the day until your profit target is reached. (I always close my position when I go to sleep – no bad dreams and sweat at night.)

Sweet dreams and good trading.