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steven poser wrote:
> Of course trailing stops can work too for those with an itchy trigger
> finger, but if what got you into the original trade is still valid, you
> might want to look for a re-entry point (that has a decent risk reward),
> below your just exited level (assuming the original trade was a long) so
> you have a chance to let the profits run after all.
This is a very good point. Exiting a trade does not mean at all that one is
foregoing future positive movement. The trick is to look to exit when
conditions are temporarily unfavorable, and to look to re-enter if and when
they become favorable again. This does not mean, however, that one ought to
only re-enter below one's exit (assuming we're long) - in fact, most often a
good re-entry will be above the exit - for instance, taking out the
resistance it had previously failed at. One must look at the cost of this
style - commission plus slippage (the difference between the exit and
re-entry) as insurance - protecting one's P/L level from slipping further.
This is a very good strategy overall when applied properly.
Regards,
A.J.
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