Hi,
This is just a brief description of how I manage my trades. It's important to juggle a few factors in these sort of cases.
Hope this is helpful to someone!
Mark
This is just a brief description of how I manage my trades. It's important to juggle a few factors in these sort of cases.
- Firstly, it's best not to mother a trade to much. You need to give it room to breath and keep your stop in a place that isn't going to kick you out to early.
- If the market is telling you something is potentially wrong, you need to be flexible and decide what to do about it. So here we have divergence on the RSI and we're losing buying power early on in the break (plus approaching the next resistance point (blue line)). I prefer to see the breaks move for some time - they are usually strong or don't really become anything.
- It's good to always find a place to let the market take you out. so after seeing potential divergence, rather than just selling, if you put a stop in a place that the stop has to break to go lower you are allowing yourself the slim possibility that you will remain in the trade.
Hope this is helpful to someone!
Mark