Hopefully by now you are realizing that you cannot trade without stops in place, either mental stops, or hard stops. Either way you need stop, and I really suggest that unless you are a seasoned trader you use hard stops.
Initial Stop - This is the stop you place once you enter a trade. You must know where this stop is going to be before you place a trade. You will use this stop level to determine what size your position will be.
Trailing Stop - Moves with the market flow. Essentially you are reducing your market risk or locking in profit, depending on where you are moving it to. This should be based on logical areas based on price action, not randomly.
Resistance Stop - This is a method of moving your stop to recent pullbacks within a trend so if the market turns around you have exited with some profit.
Bar Trailing Stop - Once price is at your profit target you can move your stop 1 tick below the current bar, so the instant price starts moving against you, the position is closed.
Trend Line Stop - You stop is continually moved below a trendline (drawn from atleast 2 pivots) allowing you to capture a larger size move.
Regression Channel Stop - Similar to Trendline stop, however instead you use a regression channel to get you out of the move. Gennerally Speaking you want price to close below the channel before you exit the position as often price will poke out at the extreme's.
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Last Updated ( Friday, 27 February 2009 13:26 )
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Stop Losses
