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Hi, if I place a limit order around that BO point and entry triggered, (aka measuring gap in this example,) is it correct to place SL below that LH? After that BO bar, I was thinking that it became a major HL. Or should it still be the bottom of the trend?
If the answer is yes for my first question, can I have a tighter stop-loss using lower timeframe? Since the momentum is so strong, maybe it is okay to go to lower timeframe to see if I can find a major HL to use as stop-loss. I don't think this is the best practice but would like to hear some opinion.
Yes, you can try, we all did, but the outcome is not usually good. If you entered the trade fearing the risk you are putting yourself in disadvantage. Instead of looking in lower time frames Al recommends reducing your position size.
In this particular case, the BO on this chart will be consecutive trend bars in the lower time frame so no big deal.
The initial stop should be at the very bottom but once the bar closes on the high you can trail it.
@ludopuig Thank you for your answer! When that HL becomes major HL maybe I can scale into my position instead of trying to use tighter SL. So partial position at first with stop on the bottom of trend. After bars closing on its high, add full size (total 1% for me) instead of using tighter SL with higher risk of getting stopped out.
This strategy sounds better!
