Note - One of the best forms of Price Action is to not try to predict at all. Instead of that, ACT on the price. So, this chart tells at "where" to act in "what direction. Unless it triggers, like, let's say the candle doesn't break the level which says "Buy if it breaks", You should not buy at all. ======= I use shorthands for my trades. "Positional" - means You can carry these positions and I do not see sharp volatility ahead. (I tally upcoming events and many small kinds of stuff to my own tiny capacity.) "Intraday" -means You must close this position at any cost by the end of the day. "Theta" , "Bounce" , "3BB" or "Entropy" - My own systems. ======= I won't personally follow any rules. If I "think" (It is never gut feel. It is always some reason.) the trade is wrong, I may take reverse trade. I may carry forward an intraday position. What is meant here - You shouldn't follow me because I may miss updating. You should follow the system I share. ======= Like - Always follow a stop loss. In the case of Intraday trades, it is mostly the "Day's High". In the case of Positional trades, it is mostly the previous swings. I do not use Stop Loss most of the time. But I manage my risk with options as I do most of the trades using derivatives. =======
Just to give it more room to run, different trading styles will set different stops. I would set a much tighter one as you can find out cheaply if you are wrong here, and just look for a reentry lower. You just don’t want your stop getting hit by normal ADR price action.
DGreer
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@sliceofbytes, Right, I kind of already knew you would say that (give it room) but my question surrounds (not so much the idea of giving it room, but) the idea of being below the 38.90 line for a very long period of time. The hard stop at around 31 was last touched in March 2020. Are you prepared to give it room in the red for another three years just to see your stop hit? The reason I found this intriguing was because at first glance I didn't think it was a Monthly chart but a Minute chart! When I realized it was a Monthly it blew my mind. So I'm just wondering why you would wait that long with money tied up?
DGreer
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Hi. I'm kinda new to trading so I hope my question doesn't sound too stupid, but here goes: Since any price below 38.90 would disconfirm the bounce line you have drawn, why is the stop loss so far away? And since this is a Monthly chart, how many months are you prepared to be wrong if it does go below the 38.90 line? Please walk me through your trade idea if it doesn't bounce as predicted. Disclosure: I have no open positions with Altria. Thanks.