I want to know what mistake i did today in identifying the trade,
My logic was upward trend RSI reached peak value, got engulfing candle next candle showed rejection from top following two were small candles showing exhaustion, executed trade with sl of engulfing high, this clearly did not work, please share your thoughts as it will help me get better at my trading
Trading does not work like this, whatever your logic.
Wins and losses go together. You win some, you lose some. If after that and after charges you make good money over lots of trades in different environments, then maybe you have something that works. So a single loss is not necessarily a mistake and neither does a single win mean anything.
As an overly simplistic example - You can line up x conditions and buy something and then some large institution places multiple sell orders because Fund manager feels its overvalued and market moves down. Will he look at your rsi etc logic ? Probably not.
Now whether your idea works, you gotta test it over large sample. Most of the time very little learning is possible, if at all, from a single trade. This trade lost, move on and take the next one and repeat and repeat and then see your account balance over time. Ideally we should have some proof of edge before deploying serious money. I used to trade with SBIN 1 qty for some time just to test stuff out.
thank you, I will incorporate what you shared
Please perform backtest of any strategy.
Once you have the strategy down then trade with minimal amount to learn active trade management and psychology of putting actual money on the line and gradually increase size.
Deploying a strategy with live capital that you’re not 100% certain has a positive edge will lead to FUD and poor results. It’s a common theme among losing traders to go from one strategy to the next whenever they encounter a drawdown because they don’t believe in the strategy anymore.
thank you