The Problem With Stops

Tuesday 19 May 2009

There is an article on the main page concerning
stops and how important is their selection.

It became apparent about 10 minutes after
getting stopped out the second time that what
was thought to be a washout of stops the first
time has just occurred.

Volume had increased on intra day charts that
suggested the probe which carried price to the
58.93 low had a high probability of being the low
for the day. However, price had moved sufficiently
away from being stopped out that it increased
the risk of being wrong a third time too high a
level for another re-entry.

Trade location is very important in any position,
and the selection of the second stop was off just
enough to lose a decent potential, as price has
since rallied uncorrected, since.

The right idea, the wrong stop.

Always room for improvement.