Which is better? Get time for trading in order to get a better reward: risk ratio and larger payments or to trade later with more confirmation and higher quality? This question usually comes up in our pro-area so I thought I would share with you my opinion and explain what most people overlook.
What is the meaning of early / late opening (entry) really?
Let us first be clear on what we mean when we talk about early and late openings. Each pattern or method, always have an early or a late öppningssignal, depending on what style you want to follow.
When we look at a head – axelmönster, it means for example that a trader goes in before the neck is broken when he goes in too early. A trader with late opening comes in after the neck is broken. A trader using moving averages can use a smaller moving average to get the past signals, while a trader who wants to have later items use a higher moving average.
A support- / motståndshandlare come in at the right level for an early post, while the senhandlaren waiting on a bekräftelsessignal at the levels.
This idea can be applied to any trading system, pattern or approach; There is always a way to get into a trade earlier or later by changing the rules.
1. The early opening for more $$$
Advantages: most of The traders are looking for the early opening since early opening will give you a better utbetalningsförhållande, your stoppförlust can be less and the potential profit becomes larger.
There even seems to be easier for the patience. You don’t have to control your impatience when you are waiting on a trade or have to worry about a trade from you, because you are going faster. But is this really true?
Cons: this is the area that most people overlook and then get in trouble. An early opening means that you usually have less confirmation and thus have to trade a lower profit. The earlier the opening is, the less signals you will have and the higher chance it is a false signal.
The problem here is that a low-profit may be a bit harsh for the merchant’s emotional part. Even if the reward and risk is usually lower, but the higher the win rate considering quickly your losses, when many of the losses can be emotionally challenging. A trader must ensure that he even after a series of losses still follow their rules to the letter, will begin not to doubt their system and grabs all the trade, without fear, without överhandla.
A system of early opening sounds good in theory, but when it comes to reality, it is usually too challenging for most traders and they quickly begin to deviate from the plan.
2. The late the opening system for a more balanced approach
Advantages: In my own trading, I prefer a later öppningssmetod because it is much easier when it comes to the emotional part. You get much higher kvalitetshandel which means that earnings are generally higher. This also means less emotional problems compared to a system with low gain. We all know that emotions are one of the main problems for most traders and that the late approach can help you overcome many of these problems.
Disadvantages: the Disadvantage is that you need to be more patient and wait for all of the signals to occur. The risk of reward: the Risk may even be lower, but higher earnings count towards this effect. The disadvantages are not so bad and for the pros, it is worthwhile to explore the late öppningsstilen.
Final words: not better or worse
The most important part here is that you need to understand that there is no better or worse. Both methods can be traded on a potentially profitable way. But a trader must ensure that he understands his own personality to find the right method for himself.
Are you OK with a lower profit? You can manage ordinary losses and not start to doubt on your own system? You can then ride the winners longer to compensate for the losses? Then it can early the opening system be a good fit.
Or are you a more patient traders can wait for the perfect trade and do not mind not having many shops all the time? I get around 3 – 7 trades a week with ”late” öppningsmetod that seems to work for me. The late the opening system which is linked to my ”swing” approach is usually a better fit for people with regularly dagsjobb.
System design is an important part of profitable trading and many traders skip this step and do not understand how the choice affects their life as a merchant, and the wrong decision can destroy your chances to succeed when your system does not match your personality. Even if you are not aware of it right now, is you are currently already about a late or early opening so I recommend you spend a few moments to examine yourself and your style in order to get an idea of where you are and where you want to be.