S T O P L O S S P L A C E M E N T

[chaltonmoyochadd]

Stoploss placement would ideally be above the 1st swing high after the push out of the consolidation range. This is important because it is not uncommon or infrequent for there to be a 3rd swipe at the HOD or LOD. If your stoploss has been hit it does not mean that the pattern necessarily fails and you should not "go on vacation". In most cases it means that there was not an adequate accumulation of positions at this level and the MM decided to move 25 Pip further away to entice more and more traders to take this direction. So the strategy on the 1st failure would simply be to wait for price to move another 25 Pip or so further away, develop another reversal pattern and then re-enter the trade when you see the setup recurring. If you do happen to be going the wrong way (i.e. against the true trend) then it is worth recalling that if the ADR is about of 150 pip, and you know that the market moves in 3 levels then even if you continue to enter in the wrong direction with your signal you will eventually fall into the right trade. This will still be profitable provided you have a tight stoploss and still maintain a 50 Pip minimum target. This will be accentuated if you scale into a position so that the initial stop loss is relatively small compared to the overall scaled in position. steve said

 

[HackSaw]

Stoploss placement would ideally be above the 1st swing high after the push out of the consolidation range. This is important because it is not uncommon or infrequent for there to be a 3rd swipe at the HOD or LOD. If your stoploss has been hit it does not mean that the pattern necessarily fails and you should not "go on vacation". In most cases it means that there was not an adequate accumulation of positions at this level and the MM decided to move 25 Pip further away to entice more and more traders to take this direction. So the strategy on the 1st failure would simply be to wait for price to move another 25 Pip or so further away, develop another reversal pattern and then re-enter the trade when you see the setup recurring. If you do happen to be going the wrong way (i.e. against the true trend) then it is worth recalling that if the ADR is about of 150 pip, and you know that the market moves in 3 levels then even if you continue to enter in the wrong direction with your signal you will eventually fall into the right trade. This will still be profitable provided you have a tight stoploss and still maintain a 50 Pip minimum target. This will be accentuated if you scale into a position so that the initial stop loss is relatively small compared to the overall scaled in position. steve said

Good insight. Thanks for this, I really find it helpful

 

[erynade]

i already copied your explanation at my sticky notes.