14c Trend Stop Placement

Hi w,

I think this was a broad bear channel so the bull spike is a 2LT into TL.

Some traders might exit 1-2 points above a bear bar, or on big bull bar. But if they exit early it's probably important to re-enter when the bull reversal fails which looks like during OD bar (A) here, so basically during an L2. So I'm not sure it really makes a difference whether exiting with 1-2 points or some other criteria. Exiting more frequently will just cause an Always-In trader to have to re-enter more frequently when bull reversal attempt fails. Wide stop makes it easier to hold through PBs for longer with smaller size to see if it's really an AIL bull trend now.

Hope this helps,
CH
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Hey, 

I would probably use the stop above the signal bar in this case. The signal bar is good and the trend is quite possibly ending. So if you use the signal bar stop and go for a scalp you would be safer and in this case capture a win. I think this is in line what Al is saying in the later videos (33) about protective stops. As I understand it, you can always put your stop above/below a good signal bar. Its a matter of preference and depends on if you want to scale in later.

Edit: if the signal bar is really small, you would probably have to use a different stop. But thats not the case here imo.

what a great example, and the reason why exit early  4 to 8 ticks above

Those 4-8 ticks are 5 points right now right?

The scalp size (5min ES)

Good point. In the book "Reading Price Action Charts Bar by bar" there is a mention of using 2pt money stop if daily average is no more then 15pts (p.84). But may be same concept can applied with prices are in the pullback/range phase?