Maintaining a focal point during a trade is quite hard. Most traders will tend to focus on the DOM and whether the trade is making or losing money. This can lead to emotional trading instead of objective trading (chart trading).
Maintaining A Focal Point During A Trade – Using the Profit or Loss Window
For example, here is a simulated trade on Gold using the Profit and Loss view. You can see that profits had been as high as 1840 then dropped back down to the current profit of 1105. Maintaining a focal point during a trade from the Profit or Loss view means that you may exit to quickly either because the profit has gone up and you feel that “enough” profit or the loss gets too painful for you to bear, even though your stop has not been triggered.
Maintaining A Focal Point During A Trade – Using the Chart
Now let’s view the chart as a focal point during a trade. Below is the chart for the same trade. The solid red line is the initial stop on entry. Then after price moves in your favor the yellow dotted line begins to move up with price. Once the yellow line is greater than the red line, this becomes your stop, if touched. As long as price is moving up the yellow line follows it. However, if price touches the yellow line then you exit. Each bar is 3 minutes in length. So now you have two focal points on the chart to keep your mind busy.
One. the yellow line is moving up with price. This allows you to capture more profits if the trend continues up instead of using an arbitrary number of ticks and missing out on the remainder of the move.
Two, each price bar is 3 minutes in length. This gives you an endpoint for anxiety. In other words, in 3 minute the bar ends and you use that as a focal point for staying in the trade. This is a technique used in other times of stress because you are taking the “I can’t take this anymore” (unknown amount of time) to placing a time limit on how long you will have to endure a stressor. In essence, you are forming a specific countdown which can overcome the unknown factor (how long will this take).