I have been trading for a number of years with a limited amount of success. One problem that I have been unable to solve is that the market is incredibly consistent at taking out my stops on spikes against me before moving in the direction of my trade. As a result, I get stopped out of many positions that would have otherwise been profitable.
This consistently occurs with any instrument I have tried to trade, either long or short. For a year or so, I decided that the market was
out to get me personally.
I've outgrown that bit of narcissism, yet the problem still remains.
I've tried loosening my stops a bit. The spikes that take me out only grow accordingly. I've tried--sad to admit--trading without stops. Then, the moves against me continue against me rather than being spikes. I've tried using a set percentage as a stop. I've tried being on the trade side of Support and Resistance. I've tried being on the opposite side of Support and Resistance. I've tried alot of approaches, none of which seem to work.
Please note the attached chart as an example. It is a chart of the morning session of ES for Oct 23, 07. The posted chart has 1-minute bars to show that the spike that hit my stop was the very top of the move against me. I entered the trade based on a consolidation on a 233 tick chart.
1. ES shorted based on pennant consolidation
2. Stop placed 0.25 above 0.5 Resistance Level
3. Stop hit on highest spike of retracement for loss
4. Trade re-entered @ 1520.25 for nice gain
Any recommendations y'all can offer would be greatly appreciated.
Thank you,
Bam-Bam
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* Not a newbie, I just trade like one.