On Monday 29/02/16 morning, whats look like a bullish reversal on EURZAR turns out to be a big bear coming too fast and furious. It came down so fast and hit my stop loss within 1 day. Everything is ok for this pair, its on a up trend and got a bullish reversal but it could be at the end stage of its up trend as there's a lower high. This could be the thing why this trade didnt work out.
I spaced out my stop loss widely as I dont want to get stop out unnecessary but its a double edge sword. If it hits, the loss is huge. My biggest loss so far and I am licking my wounds -S$484.12 *ouch!*
Trading Plan:
1. Trade with the trend
2. Trade when there is a price action reversal with the trend continuation
3. Place SL on previous high/low candle (Limit my loss)
4. No TP. Let market decide when to exit (Let my profit run)
Jimmy,
ReplyDeleteA stop loss is a pre-determined monetary loss that we can accept BEFORE a trade is made.
If its triggered, its triggered. There is no ouch or biggest or anything.
It's a symptom your position size may not be in harmony with your desire not to be stopped out unnecessarily versus the amount of monetary loss you can "bear" without ouch ;)
$500 loss out of a capital $6000 - that's a 8% hit. Money management?
noted
Deletemy stop loss is too wide
i thot i got a high probability method
i will work on my stop loss and make it tighter