Quote:
Originally posted by TTWSX102
Retractments seem to be the hardest obstacle for me to overcome in trading. How do you tell when a retractment will become a full blown reversal? I set a stop on eur/usd and the retractment came within 1 pip of my stop before turning around for a 80 pip gain. Can anyone give me any advice on determining the difference between a retractment and a reversal? Your comments would be much appreciated.
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$64,000 question, it's a dilemma for most traders. Support/resistence levels offer a clue, fibonacci is helpful, momentum, overbought/oversold indicators such as RSI....the list of TA indicators is pretty endless. At the end of the day it all boils down to justifiable risk -vs- the possibility of a comparable reward.
If you were within 1pip of a stop on retracement before the trend continued then I'd say you're doing well, you can't get much tighter than that!
Out of interest why did you not close or reverse the trade for the retracement and re-enter?
Mick