So you studied the speed of the market and momentum of price. You then did a quick check to see if there were any announcements that would change things. With the coast clear of any market-changing news, you identified the price range and started to create a trade plan based on a break or bounce at support and resistance, ideally in the direction of the long-term trend. You even used pivots to overlap the likely range of the market with the range of price for the identification of entries or exits. You are now ready to pull the trigger, right?
At this point, you may have successfully planned a trade, but we need to do a risk analysis and manage the trade.
Every trade has two limits. One is for potential profit. The other is for potential loss. Which is more important? Greed or fear?