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Why I Only Trail Stops to Breakeven

August 30, 2012

By the time we opened the market was making new lows. I sold a pullback to the EMA, was filled at my profit target, and then shorted again on the next pullback to the resistance line. The risk/reward was a little dubious on this position, but it worked out. The third short was also off the same resistance line.


Daytrading Strategy 30th August


Once the bar highs fell below my entry I brought my stop-loss to breakeven – with two profitable trades in the bank, my main priority was to protect these gains. I could also have tightened my profit target, but I didn’t. Over the long run I know that it’s better to leave my target down at the lows where the potential reward for my risk is greatest (in this case a full 4.50 points). Remember: the maximum risk that you assume during the trade is the risk that counts. Trailing my stop to breakeven is irrelevant – I could have been stopped out for a full 1.50 point loss immediately after entry, and this is the amount that I must weigh against the potential reward.



+0.00 (scratched at breakeven)


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