Do not let a profit turn into losses. This is a principal in trading system that we often hear from the master trading. If prices move in accordance with our position, use a trailing stop or put our stop losses in the break event point. So if you already have a profit of 10 pips, quickly activate the trailing stop. What happens then prices turned direction and touches your stop losses kicking you out, then turned again in accordance with your position and this time the price moves fast. Ho .. ho .. ho. if I were near you that time, believe me I would also go as fast as possible.
Trailing Stop With Fractal and Bar High-Low
There is a change from a trailing stop method that I use this time(Charlotte). Previously I used the Keltner Channel, so this time I use 2 Fractal and the latest 2 Bar as stop losses. But I still use Keltner Channel as a guide to do the trailing, only the position of stop losses are no longer on the Keltner Channel itself.
In order to obtain the position of stop losses I compare the highest / lowest price of the last two fractal. I compare this price again with the last 2 bars. I use the last 2 Bar considering the highest / lowest price could be in one of this Bar. Trailing stop itself is activated when the price penetrates the Upper / Lower channel of Keltner Channel indicator.
The principle I want to reduce the risk in trading. While difficult to make a profit, then we better think about how to reduce losses. And trailing stop this is one way to reduce the risk of each transaction.
Wednesday, October 13, 2010
Risk Warning
Please note that Trading in the Foreign Exchange market might carry potential rewards, but also potential risks. You must be aware of the risks and are willing to accept them in order to trade in the foreign exchange market. Don't trade with money you can't afford to lose.
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