Ok, so I’ve got a trade on and it’s working. Man, I really want to move my stop to either reduce the potential loss or lock in some profit. My finger is itching on the mouse button. So I tighten the stop and $#@*(@#&, stopped out. Cannot even count how many times I’ve done that.
Borrowing from Einstein again : stops should be tightened as soon as possible, but no sooner.
My current plan is to (try to) resist moving a stop until a new area of support or resistance has been established. This generally works out to be a price pivot point or long tail or sideways consolidation. In other words, if long, I want to wait until price tries to go down and fails. Then the stop can be moved under the new support, but not “too” close.
Here’s an idealized trade example. I just picked FSLR because it had a relatively clean uptrend on the 5min.
Borrowing from Einstein again : stops should be tightened as soon as possible, but no sooner.
My current plan is to (try to) resist moving a stop until a new area of support or resistance has been established. This generally works out to be a price pivot point or long tail or sideways consolidation. In other words, if long, I want to wait until price tries to go down and fails. Then the stop can be moved under the new support, but not “too” close.
Here’s an idealized trade example. I just picked FSLR because it had a relatively clean uptrend on the 5min.
A) Excellent entry over 5min high ! ( I am a great trader from the left side of the chart, lol ) Initial stop under the low of that bar. Under low of day would be good too.
B, C, D) Stock tries to go down and then breaks back up.
E) Breakout from a little consolidation. It shouldn’t come back into there.
F) Another attempt to go down which goes back up.
(between F and G, one might consider a tighten after that green bottoming tail. It should have gone up after that.)
G) Stopped out for about 0.50 gain
B, C, D) Stock tries to go down and then breaks back up.
E) Breakout from a little consolidation. It shouldn’t come back into there.
F) Another attempt to go down which goes back up.
(between F and G, one might consider a tighten after that green bottoming tail. It should have gone up after that.)
G) Stopped out for about 0.50 gain