RE: CHARTS -T LINE TIPS16 Jan 2016 08:16
Faraday losing trade from Thursday. Further comment. As I said in an earlier post I don't like their stops because they are too far away from the suggested entry level. They appear to make even money bets. STOP LOSS A BOG STANDARD 60 pips no matter what the immediate price movement has been and taking profits round about 60 pips. In this case the 2 previous big moves were 45 pips long followed by a 60 pip short, see first chart. Have another look at one of the 2 possible short trades that day, second chart, the first of which I caught quite a bit of first chart. I had set 2 take profits limits at just under 6013 and sod's law the lowest price got after my trade was 6013 a whisker away from making 4k instead of 2k. Entry level was above theirs by 10 pips giving one an extra edge, based on SB's approach and the 2 ema's. Once the trade was in profit I moved the stop loss to just short of MY perceived minor resistance level established from looking at higher time charts, a tool I learned from another of my mentors. I always day trade forex which means I am glued to the screen as long as I am trading because it moves very quickly. One moment one is in profit and in a blink of an eye one can be in loss. I then left the trade knowing that if my target of 6012 odd got hit I would make a great deal of money but if price reversed I would at least take some money off the table. As it turned out price did reverse and went north for the rest of the day which is why it is so important to move stops to protect profits, even moving them to entry level or better as in my case. It is so important to protect profit and one's capital. Moving the stop loss to entry level as soon as practicable protects at least capital and gives one a free bet/ride. If price retreats and closes the trade so what. It proves one's timing and entry level was wrong and gives one another chance to get in but at a lower or higher level dependent on whether one is long or short. It may take one out of eventually a profitable trade but it has preserved one's capital. Another mentor advised to concentrate firstly on loss and only then on profit and to protect capital at all times.There will be a plethora of potential trades every day. Getting back to why their stop loss is too far from price. Why wait for a loss of 60 pips to crystalise? Cut your losses short. Using SB's 2 ema's would have got one out well before a 60 pip loss. I got burned by Faraday last year stuck to their stop loss and ended up losing 4.5k. Never again. Just as my limit profit target was missed by a fraction their stop loss just got triggered before price reversed so if the stop loss and stop limits were a fraction higher the 4.5k loss would not have been incurred and the stop profit would have made 4k profit . Good luck trading/ investing always.
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