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And that is one way of trading. Another way is to be confident in your entry and stop level and then let the trade work. This will reduce commission costs considerably and help prevent overtrading. |
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The question boils down to this: at what point do you know you are on the wrong side of the trade? Does you stop have to be hit for you to know that?
Why not one tick before? How about 4 ticks before.
At some point prior to the stop being hit, you know you are on the wrong track. Why not exit at that point?
I guess I should of mentioned I also believe in UNDER TRADING IN BOTH SIZE AND FREQUENCY.
Hence I talked about entering at the right time to avoid the need to exit during the sideways action. Also note that I did not say jump aboard the market in the opposite direction. Here we are talking as if you got the direction right, just not the timing. Get out and wait. but be nimble.
And again, Pit traders are not worried about commissions. As I said, these two gentle men are pit traders.