I am now going to consider what has been said in the hyperlink.
I have already discussed the halving of allocated trades and adding to them upon a retrace/pullback.
To trade 2 lots is effectively the same thing.
Note that in the given short trade on the hyperlink, the price action continued to go down and did not retrace thro the initial starting point, ie the open of the 4th candle.
We, however, regularly experience price pullbacks right thro the opening and even come close to our stop loss!!
Therefore, the idea of shifting the stop loss to the entry/opening is not a good idea. The 2nd lot will not only return to zero profit but it will go into the negative thus taking away from the initial first lot profit. If the price returned only to the entry we would make a profit only on the first lot. But going thro the entry reduces our 1st lot profit to almost nothing.
But in nearly every case the price retraces thro the short entry and goes long when we want it to go short.
We are, therefore, better off leaving the stop loss where it is and not moving it.
There are then 3 separate senarios which are looked at in the next post.
|