Friday, May 16, 2008

Stopped Out of It

To get stopped out is common occurrence in trading. Most traders --myself included-- concern themselves with where to place stops, but not enough goes into just where to get back into the market.
Ideally the market should target the next major support level on the downside and bounce from that number, but that is not the buy at which to re-enter the market. The buy at which to re-enter is the closing price of the first level that was broken on the downside.
Catch that? It's the closing price of where you thought you should.

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