Hi guys I was wondering if y’all exit your trades when you see they go in the opposite direction? I entered a trade thursday evening and friday morning before going to work I saw some candelstick formation who told me that sellin was wrong so I left my position with a few euros loss cause everybody says to cut your losses early. After checking the market in the evening I saw price had never reached my stop loss and now price was in the near of my opening price.
So now I’m asking myself if I should ignore the rule and just let them run until they reach my stop loss. Of course my trading system (or to be precise, his rules) say to let my trades run but the problem was the weekend. My plan also says to exit all trades by friday evening.
It depends on your strategy. Do you place you SL in an area where if it’s triggered the original reason for the trade becomes void? For example, are you putting it beyond a swing high/low, at the other side of S/R, or at the H/L of a candle? Or are you setting it off in a distance, at a chosen percentage of your account (1-2%) with no pre determined destination?
Me personally, I set it in an area where my trade becomes void if it’s hit, therefore I don’t usually close it early. My rules also say it’s okay to hold over the weekend because I’m a swing trader and most price fluctuations won’t affect the trade too much.
In this case, closing it would technically be following your rules. You might want to refine your rules so that you are not opening trades too close to Friday close.
I rarely move the stop-loss. But I do close positions if the chart TA features I look for in order to enter a position start to disappear. I can always get back in if they re-appear again.
There is no easy answer as it depends on your strategy process. Most pro traders are aware of changing chart patterns for the pairs they know inside out, and they could wait and see if a losing position turns back in their favour. What they won’t do is to add to a losing position.
For us, with a much smaller account size, we need to always protect our account, limit risk, and money manage throughout. Which is a challenge, and we’re faced with managing emotional control. A failure to do so is the major reason 85% of traders fail.
Your example is typical how emotions can affect what you do when faced with either a winning and losing trades. In principle, closing losing positions early is protecting your account, so it can’t be a bad move, especially if you have the time to open a new trade if the price action reverses back in yur favour.
What is more difficult is to nurse winning trades, for fear of losing out on a profit. So what I do is when I have identified a trending trade that meets ALL of my tight criteria, the probability is I will be on the right side of a trade. No more than two trades per day with a max 5% open trade risk.
Therefore I can place a T/P where I think trades could run to during the day, and place a S/L wide enough to cater for a minor trend retracement. Then close my desktop and let them run overnight if needbe.
Highly recommend looking into retest trading. It will give you a clear SL and further confirmation bias. Wait to enter a trade once price has broken out of an area of value and has retested to confirm the trend.
As they said, it depends on your strategy and money management (risk management).
I personally have a daily maximum loss, and a predefined stop loss for each trade. I rarely close my trade (if it goes against me) before the stop loss is triggered, only when i have strong conviction based on price action, that my current analysis was nulled and i cut my losses short.
The purpose of stop loss is to exit at the right time. So, you don’t need to exit trades before hitting your loss. I always leave my trade to my stop loss. You should also place a take profit order if that works for you.
I don’t really move my stop loss levels as of now. But in the past when I was a beginner, I used to exit losing trades early before hitting my stop loss. Sometimes, I regretted it too as the trend reversed going back to my take profit levels. But sometimes cutting losses early can be the best thing to do.
You not done anything wrong, everyone on this thread would have done something different starting with size of stop ect.You.come to conclusions with more experience.
Only in exceptional situations when I am 100% sure it will eventually hit my stop loss. I started doing that after I gained some experience being in the market. For a new trader it is better to leave your trades to the stop loss as you might lose your profits if the trend reverses later on. Otherwise I let the trade run until it hits my stop loss.
When I see huge deviation in my trade on the side of loss, that’s the immediate moment when I realize that stop loss is really important. Even for successful traders the stop loss plays a critical role in trading. Without stop loss I feel we can’t cut our losses.
I always let the trade run until it hits the stop loss. I think you just have to place the SL close to your opening price if your strategy involves exiting at that level. A tight SL is not ideal all the time but it totally depends on your strategy and risk tolerance.