[tymen1]

Before I consider some conclusions, I must attend to two matters.

The first concerns an error that I made in post #391 thus :

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.

To correct :

The 2nd lot indeed does return to zero profit but not into the negative. Why - because we have shifted the stop loss to the entry/opening and this means that the 2nd lot reduces to zero then closes the trade upon hitting the stop loss.

We are left with the profit on the 1st lot.

But going thro the entry reduces our 1st lot profit to almost nothing.

This statement is now completely in error. To correct (and repeat myself) - the 2nd lot hits the entry and closes the trade because we have shifted our stop loss to that point.


* * * * *


Now the second matter :

To quote from the hyperlink I gave to read :

Therefore, when the first lot meets its first objective, the second lot’s stop is moved up to break even which locks in the gain and guarantees that profit. .................................................. ..................................
When the first target has been met, the worst that can happen from that point on is the second lot retraces to the breakeven point and the trade is closed out for the net profit on the first lot.

The problem here is to ask : "where is this first target?"

If we were to consider the previous trade, it would be only 4 pips!

As we see in our trades, the price action may go long first, before it goes short!! What then?

I think we have to establish that it is not possible to know whether the price will go up or down immediately after short entry. The stochastic will only tell you the close and take no account of the full action within the candle.

It is better, I think, to set a short target for our first lot. Price action may well go up considerably before it goes down - even close to our stop loss.
To set a target is better because we then do not have to worry about bottom fishing. .
In the hyperlink example, the target and stop loss were the same but this is not always possible.This target may well be less in pips than our stop loss because of the shape of the evening star pattern.

I therefore, propose the following conclusions and a diagram to give clarity to the conclusions - next post.