Today we have one more article that will help to improve your trading skills.
Let's analyze IOTA chart.
At the point A, price bounced off and began sideways trend to accumulate force. Coming out of this channel can take a long time. Most people which bought after the bounce will set stop losses at the level of point A. And some of them will set stop losses at the level of point B and that will be a worse solution.
The price is approaching the support fast and breaks it at point C. All stop losses, at level B and at level A, have worked. Price makes strong wave after this.
We can see such a situation on graphs where price is moving sideways. That's why I often use mental stop loss, i.e. I identify level with which reaching I can close my positions by market order. In such a situation, stop loss can't work mistakenly. However, you have to spend more time monitoring graphs.
Of course, I can't recommend you to use such stop losses all the time. But if you need more reliable protection level, you can use a mental stop loss.
I am waiting for your likes, followings, and questions!