Yes,my friend....important to have a strategy and the persistence to stick to it.An exact point where you know for sure that this trade is not going the way you want it to,and to get out.A strategy to catch the most of the trend as possible.The adamant persistence to stick to plan.
Abhijit,this was a trade on the short side some months ago,ACC,tracked it for 2 months and then it gave this trade.
Charts attached below.......ACC got that sharp cut from the highs in Dec 2006.Missed the move down and then the bear-flaggish move making higher pivot highs and lows,but no where near the all time lows.Then we got that lower pivot high,and then a break of prev pivot lows.
We enter the trade short,the initial stop as mentioned.Then that sideways move,still stop loss at the initial stop level.Then it breaks below the next pivot low.Move stop to Trail stop 1.Then we get the next bar down.Move stop to the high of 2 bars back,viz Trail stop 2.Then we have two up days,but not able to take out Trail stop 2........we are still in the trade.Then another bar down.Since we saw new lows,now move the stop to Trail Stop 3.Next bar down after that,still at Trail stop 3.Now we get another bar down.......move trail stop to the high of 2 bars ago viz Trail stop 4.Another bar down,we move to Trail stop 5.Next we get a big up day.Keep trail stops where they are viz at 5.Now we get another bar down,move trail stop to Trail stop 6......why?Another lower pivot high.
Next an up day,Trail stop 6 is yet to be taken out.Then another big bar down and another bar down......now we move to Trail stop 7.Why?Newer lows.Next another bar down,but not newer lows,so we keep the Trail stop 7.Then a gap down and a move up.....still newer lows,and therefore we move the Trail stop to the high of 2 bars back....viz Trail Stop 8.Then we go sideways.....no more new lows,we keep the Trail stops at Trail stop 8.Then ACC makes a gap down and new lows......move Trail stop to Trail stop 9.Next bar down sees newer lows,move Trail stop to Trail stop 10.......next bar a gap down,we move trail stop to 11.Next day ACC takes us out of the trade at 732.
In this case,we got most of the meat of the trend.....sometimes we get taken out capturing probably half or maybe a third....sometimes we get to our initial stop the moment we put in a trade.All part of the market........importantly,our job is to detect changes in trend and once in,hold on to it.
All the best!
Happy Trading!
Saint
ps:Shall post about the adds on another day,using the same example.....Yawn!
