Classic chart pattern stop placements | Forex Factory

  • Classic chart pattern stop placements

    From blog.hycmlab.com

    One of the questions traders often ask is where they should place their stops when trading classic chart patterns. A classic chart pattern is a Head & Shoulders pattern, a double top, or a symmetrical triangle etc. This article will not go into how to identify these patterns but, instead, will give you an explanation of where to place your stops. Trading, in some ways, is more about managing your risk than necessarily executing your trade. Management trumps execution and a well-managed trade can make up for a multitude of trading sins. The foundation of that management is a stop placement and the amount of your ... (full story)

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Anotan
May 14, 2021 12:14am
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The pros of this method are that you can keep the risk to the trade very tight and have a larger position size. The cons? More stop-outs, but you can always re-enter.

Slippery subject about tight stops and re-entries, IMO I think re-entering the same setup really skews the risk.

If you run a tight stop and a RR of 6:1, but you entered off the same setup 3 times. Is it still 6:1? I'd argue that its really 2:1 since you had to enter the trade 3 times to finally get your win. Something that I didn't think about for years.
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