I traded for 1 year and got some experiences that i think will be very useful for traders.Those are:
1)Many time you will see price just penetrate your SL few pips,and many times price just nearly touch your PL and turn back.
2)Brokers know your SL and PL,so at the resistance & support levels they will dump you out,but how?
Well at those level,at some moment you will see price suddenly move strongly in fews seconds.2 reasons for that are:
-They know novice traders have bad experience and will think price has penetrate or bounce at those level and will make wrong decision.
-They want to wipe out SL of traders.Traders often put SL fews pips lower than support or fews pips higher than resistance.They know that and at those level they try to buy or sell currency to wipe out those SL.
They will find the most common SL and decide what to do.Because the chart and data feed is free and from them,how can we know if this chart is true price or just some operators manipulating it?
So my recommendation is that at those important support and resistance level,don't hurry make decision but wait for at least 2 candlesticks.
If at the support,you see price bounce back,wait for next candlestick to confirm bullish and vice versa for resistance.
Try to be patient or otherwise brokers will dump you out.
Hope this help.
Stop hunting is the fuel on which the market runs but to imply that brokers are hunting my stop or your stop alone is a bit extreme. Brokers hunting their clients' stops might be possible only during news time when the tick by tick data of most brokers would not sync with the actual rate. During normal trading times I have seen that most of the feeds are in sync and might be out by a pip or two at the most.
Fixing the stop is a tricky affair especially for the newbie and until you get that right atleast 7-8 times out of 10 you are better off trading a demo.
Just do not use stops.
I personally put a red horizontal bar on my chart to remind me when I should stop the trade. I never use SL because it's really like showing your cards in a poker game... a stop loss is another name for selling at a very bad price. When I started doing that I suddenly never seen a trade of mine rebounding on my red line... it was just the wrong or right direction.
Or what I do, which usually is effective, is set your stop price, then add a few pips. Obviously, if you place your stop RIGHT at recent S/R, you're going to get violently screwed. So add at least 10-15 pips. What's 10 pips anyway?? I think we can all afford that. This has saved me many times in the past. But of course, no stops at all is preferable IMHO, as long as you have a clue what you're doing and don't mind watching the charts....ALL THE TIME!!!!!
Not using stops is risky but can be done. I personally prefer to use them. Too many times Ive seen myself stall when the market moves violently against me. With no stop who knows how much I would have loss. It takes discpline to trade without them.
Stops are my last resort though, Im learning to get out when the market starts to talk it wants to go the other way
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So add at least 10-15 pips. What's 10 pips anyway?? I think we can all afford that. This has saved me many times in the past. But of course, no stops at all is preferable IMHO, as long as you have a clue what you're doing and don't mind watching the charts....ALL THE TIME!!!!!
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