Let's say that we have a breakout system on daily or higher time frame. This system requre big SL since the breakout box is quite big, maybe 200 pip or more.
So, which one is better way to enter market?
1. Put buy order with SL on the other side of the box, so the SL is big.
2. Find intraday S/R and use it as SL. If price hit SL, we define new breakout box, find new intraday S/R and put another buy order.
In my opinion, for option 1.
Good:
1. Need fewer time to monitor market since we only trade once.
2. Get less probability to get stopped when market in sideway / choppy condition.
Bad:
1. SL is big, we pay more in pips if we are wrong
2. Have worse R:R than option 2
Option 2.
Good:
1. SL is smaller. If market hit our buy order, then hit our SL and never back to our direction, we will only suffer much smaller loss in pip than Option 1.
2. Have better R:R than option 1
Bad
1. Need more time to monitor market because we plan to reenter market if our previous trade is loss.
2. Might get stopped cause market in sideway/ or choppy more often.
3. Might failed to reenter market if market hit our SL and then move quickly to the direction of our trade. If this happened we might lose 1 or 2 trades with small SL and miss the winning trade when market finally move to our direction and never back while Option 1 will give no loss trade and have the winning trade.
So, in your opinion, which one will you suggest?
So, which one is better way to enter market?
1. Put buy order with SL on the other side of the box, so the SL is big.
2. Find intraday S/R and use it as SL. If price hit SL, we define new breakout box, find new intraday S/R and put another buy order.
In my opinion, for option 1.
Good:
1. Need fewer time to monitor market since we only trade once.
2. Get less probability to get stopped when market in sideway / choppy condition.
Bad:
1. SL is big, we pay more in pips if we are wrong
2. Have worse R:R than option 2
Option 2.
Good:
1. SL is smaller. If market hit our buy order, then hit our SL and never back to our direction, we will only suffer much smaller loss in pip than Option 1.
2. Have better R:R than option 1
Bad
1. Need more time to monitor market because we plan to reenter market if our previous trade is loss.
2. Might get stopped cause market in sideway/ or choppy more often.
3. Might failed to reenter market if market hit our SL and then move quickly to the direction of our trade. If this happened we might lose 1 or 2 trades with small SL and miss the winning trade when market finally move to our direction and never back while Option 1 will give no loss trade and have the winning trade.
So, in your opinion, which one will you suggest?