Disliked{quote} Hi Sesamstrasse, Would you please explain option 2? I do not understand why you would set a TP and then reopen. Why not leave the order on? What is the point of taking it out and then putting a new order on again? Cheers...Ignored
Let's take a simple example: you and Guido open a long position. SL is 200 pips. ADR distance for adding new positions is 50 pips. Price retraces 50 pips, both you and Guido open a new long position. Price retraces another 50 pips. Again, you and Guido add another position. Then price goes back up to the entry point. Guido takes profits and re-enters, but you don't take profits, you leave the trades alone. Guido has 150 pips in his pocket at this moment, you have nothing. But you're still holding on, because you feel that the market will climb much higher and give you profits.
But the market goes down 50 pips, Guido enters, you don't, because you already have a position opened at this level. Then market goes down another 50 pips, Guido adds another position, you don't, because you have your second position already opened at this level. Then it goes down another 50 pips, Guido adds on, you enter with your third position. Market goes back down 50 pips, Guido adds on, you add your fourth position. Then the market goes back down 50 pips and your SL is hit at this level, because it reached 200 pips, which was your SL.
So Guido lost 200-150-100-50. You lost 200-150-100-50. The same, right? But let's remember that Guido already has in his pocket 150 pips, because he took profits and re-entered. So you lost 500 pips, Guido lost only 350. I hope that explains it.
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