Here is the final chart of the series - 20 minute chart >>>
By
tymen1 at 2008-04-10
The evening star is highlighted in blue.
As you can see, this was a dramatic trade, going down first, then retracing upwards to within 2 pips of our stop loss, then plummeting down to a real profit and passing thro the lower Bolinger band.
At the end, a large, green engulfing candle appeared on the lower BB giving opportunity to trade
long and make a 2nd profit!
* * *
So where do we exit?
To summarize, a trade is considered active until either .......
1) the stop loss is hit.
2) a target price is hit...........whichever comes first.
So where are you going to set your target profit?
Well, that is for you to choose. Do you like roller coaster rides? Or will you trust intuition and get out while the going is good?
I, for one, scalp for safety. The safest pips are those closest to the candle pattern.
Something will need to be said about risk/reward ratios.
Lets conclude :................we have looked at :
1) Choosing candle patterns carefully
2) Setting stop losses correctly
3) Considered exit a method of exit.
What have you learnt?
* * *
That brings this series to a close. I am very tired from all the preparation work and unfortunately, I have taken ill. So I will be confined to bed. My ginger long haired cat, Sweetie, will keep me company.
So I will take a rest, and, all being well, I will continue on Tuesday.
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