That way, you can ride on the trend a.k.a getting maximum profits until you get stopped out. Another option is not to place a fixed profit target but use a trailing stop behind each lower swing high or low when the price moves in your favor. Now when it comes to take profit, you can use the previous swing low or high as your profit targets. As for the sell trade, you can place your stop loss at least 5 pips above the high of the entry candlestick. You can also place your stop loss a few pips outside of the support level if there is one nearby. In a buy trade, you can place your stop loss at least 2-5 pips below the low of the candlestick that has its high broken. The second important thing is to be consistent with your stop losses. What needs to be considered is that you must allow room for the price to move, so don't place it exactly on the line but also don't put it too far away either. Now that we examined the market condition, we can determine what type of trading setups that we need to enter the market.Įssentially, there are many ways of placing your stop loss in this type of strategy.
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