After trades like the last one, where you basically turn a winner into a loser, it normally comes another 1R lost (or more) via frustration and anger. This time it was a winner, but I am not proud of this one.
A week ago I told Mr. Phi something like “why moving the stop loss to loose -0.75R? Give price room and let it take the full 1R!”
Well, I either have (Finding Nemo’s) Dori’s short term memory problems while I trade or I did something really silly. I moved my stop loss to reduce risk (from 1R to 0.65R, what a risk reduction!) and the market did a high five with my stop loss and went down to my 2R target profit.
I think I will remember this one for a while.
Could have anticipated that price would keep going up given the strenght of the rally.
However, bulls and bears battled for more than 20mins in that area so it wasn’t a level to ignore. I had my chance to close the trade at breakeven but wanted to let it develop given that my stop loss managed to hold price for more than 8 minutes.
The 1hour MAB caught me out too! Now looking to that area of RESCON.
I was tempted with the H1 MAB but decided to watch after the strong move up.
“What a risk reduction!”
Not to rub it in, that really was a pointless move of your Stop Loss, but I understand the idea behind it.
I used to do the same thing, but now have a rule to never move the SL except for perhaps when price is clear of my entry, then I will move it to break even (which I did in my RESCON trade, when price was at my 2R level)
I always tell myself that there is a reason why I put the Stop in the place it is, so moving it is breaking the rules of the trade.
The best thing to do is probably somewhere in the middle, as I know that I don’t do enough to mitigate risk and cut trades early.
Totally agree with you guys.
Even my own rule is to move it after it reached at least 1R in my favor! It was a poor decision that broke my own rule.
Time to move on!
Ouch on the stop loss early move 🙁
Joel made a good point about the reason for a stop, it’s important to let it do its job. I try to only move it when the trade is going in my favor and protective structure can be used to decide where to place the stop so it doesn’t get too close.