Live Trade Examples Why Pullbacks are Crucial in Forex Trading

Waiting for a discount is not an easy task but it is a very important one.

When a trade setup or trigger is visible, it takes iron discipline to hold off and NOT jump in the trade. In Forex trading it is very tempting to trade right now in the spur of the moment. Why?

Because our minds start playing games and tricks with our emotions… all kind of questions surface like what if I miss the trade and what if there is no pullback?

This eventually is too much to handle and Forex traders can’t take the pressure anymore. They click the button and take the trade. Seconds or minutes later they regret it and nervousness kicks in when they realize that the trade was based on emotions…

Recognizing a setup is great. But waiting for a better entry moment is where I get the best equity.

By waiting for a pullback I receive a nice discount from the market, which either reduces my loss or increases my gain for each trade. In the examples below on the GBPUSD you can see how entering a discount gives more options regarding targets, trail stops, and exits… If I enter too soon then I am hoping for the market to get back to my breakeven level, whereas with a pullback I am already up in pips…

Of course there is more to Forex trading than just that. I can only trade pullbacks successfully when a trend is present and recognized, and only win trades if I use well defined stop losses and take profits.  See the image below on the AUDUSD and EURUSD.

Many green pips, Tarantula FX

Ps. There was one loss on the USDCAD last week and the NZDUSD setup was not triggered.