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Hi All
I have a couple of situations and I would like to know your recomendations.
Case1)
When I enter long in a Breakout and I place my stop, lets say at 500 pips distance (at the begining of the breaout) and the price keeps raising up, with strong breakout bars with no pullbacks, there can be a moment in which I can be winning lets say 3:1 (at 1500 pips distance from my stop) or even mor, but as there has not been any pullback, my stop is still where it was (or maybe at breakeven) and it is now too far.
My stop is now too far and if I understood correctly, I should not risk that much , so I should reduce my position size. If I see what the price is doing, and I believe it is still going up, is there any other recomended option that I can do instead of reducing my position size? Maybe using a money stop? Maybe changing to an small time frame to see a pullback? What do you recomend in this cases?
Case 2)
I am using a tight stop and I am planing to go for a 2:1: The price starts rising and a I am close to the 2:1 but there has not been any pullback and my stop is now far: Shall I reduce my position size even if I have not reached the 2:1? What do you recomend to do in this case?
Thanks on advance.
Javier.
My recollection from the video course is that yes, it's recommended to take partial profits in case 1, and in fact institutions taking partial profits is what will eventually cause a pull-back. In case 2 if you see what could be the start of a reversal right below your target it's ok to get out.
