Forex - stopped out

[neil]

Aud/cad

AUD/CAD was more trendy today. Marvellouse thing hindsight

 

[nbo2]

Seems like I set my stop too close.

What do fellow traders think :?:

Neil,

You have asked for opinion about this trade and the stop in particular and my feeling is that the responses you have recieved so far have fundamentally failed to address the real problem that I see trading at this level.

I find it hard to understand the logic in entering at the level you did other than for a short-range quick hit with an exit anticipating retracing some of the ground covered on the upmove (when even though there could be some forward momentum, the likelihood of re-visiting lower as a result of short term traders like me selling to take profit at around those levels not to mention those fading the moves on an anticipated consolidation day becomes a much higher probability.)

I would say that you were stopped out not because your stop was incorrect, but rather because your entry point and/or expectations from that entry point were suspect.

On the larger scale, there was much indication of resistances at this level around 80-90. In addition, with many traders having entered much lower between the 30 and 40 level, and much to digest in the market from last week, making the probability of a large directional trend fairly remote, and little news of significance to drive the market, effectively buying tops and selling bottoms - i.e. playing breakouts becomes a strategy designed to give any profits previously gained back to the market.

You should also note that the rejection of and reversal from the 80 area was very clearly signalled at all levels from 5 min downwards inclusive. This in itself should be enough to give rise for concern about the robustness of a long position at that level, and sufficient to initiate an immediate exit for at least break even.

The stop level is (imo) largely irrelevent, since messing around with stops presents a whole new set of problems, and the optiomal pre-fixed stop level/ratio/distance is almost impossible to determine. It is the market itself through the action of price that should determine whether holding or continuing to hold such a long position remains valid or whether the positions should be flatenned or reversed.

I hope this has not been too brutal an answer to your question.

nbo2

 

[commanderco]

Neil,
The stop level is (imo) largely irrelevent, since messing around with stops presents a whole new set of problems, and the optiomal pre-fixed stop level/ratio/distance is almost impossible to determine. It is the market itself through the action of price that should determine whether holding or continuing to hold such a long position remains valid or whether the positions should be flatenned or reversed.
nbo2

Very well expressed

 

[neil]

Excellent reply

Neil,

You have asked for opinion about this trade and the stop in particular and my feeling is that the responses you have recieved so far have fundamentally failed to address the real problem that I see trading at this level.

I find it hard to understand the logic in entering at the level you did other than for a short-range quick hit with an exit anticipating retracing some of the ground covered on the upmove (when even though there could be some forward momentum, the likelihood of re-visiting lower as a result of short term traders like me selling to take profit at around those levels not to mention those fading the moves on an anticipated consolidation day becomes a much higher probability.)

I would say that you were stopped out not because your stop was incorrect, but rather because your entry point and/or expectations from that entry point were suspect.

On the larger scale, there was much indication of resistances at this level around 80-90. In addition, with many traders having entered much lower between the 30 and 40 level, and much to digest in the market from last week, making the probability of a large directional trend fairly remote, and little news of significance to drive the market, effectively buying tops and selling bottoms - i.e. playing breakouts becomes a strategy designed to give any profits previously gained back to the market.

You should also note that the rejection of and reversal from the 80 area was very clearly signalled at all levels from 5 min downwards inclusive. This in itself should be enough to give rise for concern about the robustness of a long position at that level, and sufficient to initiate an immediate exit for at least break even.

The stop level is (imo) largely irrelevent, since messing around with stops presents a whole new set of problems, and the optiomal pre-fixed stop level/ratio/distance is almost impossible to determine. It is the market itself through the action of price that should determine whether holding or continuing to hold such a long position remains valid or whether the positions should be flatenned or reversed.

I hope this has not been too brutal an answer to your question.

nbo2

I welcome constructive opinion and thank you for an excellent reply. Shall print this off and study at leisure.

 

[zhk]

Hi Commanderco:

I am new to FX, could you please expland on the theory, of "Trading in Pairs", which pair would you suggest to look at, and what is the setup behing them.
Appreciate
Regards
Zee

 

[zhk]

Hi Commanderco:
The reason I am asking questions, is because I read on these boards that , this is the place to LEARN, and senior traders, are willing to explain to newbies.

I also read your comments"

"Neil,
The stop level is (imo) largely irrelevent, since messing around with stops presents a whole new set of problems, and the optiomal pre-fixed stop level/ratio/distance is almost impossible to determine. It is the market itself through the action of price that should determine whether holding or continuing to hold such a long position remains valid or whether the positions should be flatenned or reversed."

Great Point: but,

Could you please explain "Price action", on Neils chart, if you could show on his chart, why the point where he got stopped out was because of Price Action, how can a trader tell that its going to trade below this point or trade above thai point? would be great.


Regards
zarir

 

[samuelhogg]

Good evening,
I had a small short position today with etradeprofessional and a stop set at (ask) 1.8050.
The stop was hit but it says todays high was 1.8045, with there spread of 4 pips I dont think my position should of been closed. Closed around lunch time.
Any advice?