One of the issues with trading is that the market seems to be on a quest to teach you to trade badly. It amplifies every bit of insecurity and paranoia you may have and in doing so it ramps up your FOMO.
The charts below are of London Cocoa taken at different intervals and they show why waiting is an extremely important skill for traders.
The first chart was snipped at 18:00 and it shows what appears to be a strong gap up.
However, this is a four-hour chart and the candle is incomplete – a trader struggling with FOMO would have jumped at this signal. This would have been precisely the wrong thing to do.
The chart below is taken from the following morning and you can see the gap has been filled.
Simply waiting would have saved a great idea of angst. A key fact about markets that traders ignore is that they are trade generating machines and over time they will throw up countless opportunities that exactly fit your rules.
You just have to wait for them.
