Today, I would like to talk about the idea of being right. In my years of experience, it’s not about being right about what the market is going to do that helps you be successful.
It’s more about good risk management and reading the market. Personally, to help me control my emotions, I like to exit a majority of my position at the first sign of S/R when it’s with in a 1:1 to 2:1 ratio. Why? well it’s because we never really know what the market’s going to do.
So I would rather take a smaller winner and pay for my trade and then some then let the runners run. Emotionally, this really helps me to not get worry if I see price retest the entry again. I don’t believe in moving my stops.
I have done strategy research and have heard from many other traders as well that as you move your stops to breakeven + a couple of ticks. Its of no real financial gain and in-fact hurts your Net Gains because a lot of times price will retest even the good entries just to blast off in your direction.
The image shows a scenario like this. I saw my first very reasonable and perhaps a scalping target get hit. While the runners got stopped it was still a profitable trade.
Interested in learning more from Gabriel? Then check out his blog at APAZones.com.