The support forum is built with (1) General and FAQ forums for common trading queries received from aspiring and experienced traders, and (2) forums for course video topics. How to Trade Price Action and How to Trade Forex Price Action videos are consolidated into common forums.
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Hi everyone, I'm a beginner in price action trading, and I have a question about reversal trades.
Reversal trades have a low probability of success, so they require a high reward-to-risk ratio.
This means I should aim for swing trades and hold my positions longer.
However, most of the time, I enter the market based on some top or bottom patterns and minor reversals.
Then, these minor reversals attempt to evolve into major reversals, but they often fail and drop to new lows.
All top and bottom patterns include some form of a trading range. This means that if I place my stop order at a new low, it's the same as selling at the bottom of the trading range, which is a poor strategy.
For bear trend reversal trades, is it correct to place the stop loss at the low point of the bottom pattern? There might be limit buy orders betting that the downward breakout will fail or that the breakout won't create a gap.
Additionally, should I exit with a small profit instead of holding the position until the floating profit turns into a floating loss?
