Here is an example of what I was talking about.
The entry is on the open of the bar with the green arrow.
As this thread is not about
VSA, I will not get into the set up much. I will say that the entry comes after a confirmed 'test' of supply. Professionals checked for sellers underneath the market and found none.
The lower purple line is
Value Area Low. The pink line would be the initial stop. Here we have the best of both worlds:
1. Close stop
2. Stop based on reality (market).
With a stop that close, you might not even have a chance to exit prior to it being hit. On the opposite side, note that only one 5 min bar with equal close to the close of entry bar. After that bar, we are in a surging market and on the correct side. We are in tune with the market. Pretty instant gratification. We are patient while looking for the set-up, but once in we want immediate gratification.
Now, suppose are stop is lower. From a market structure point of view, a close below the
Value Area Low Pivot is bearish. Therefore, even before our stop is hit, conditions for the long trade are nullified. Why then would we need to wait for the stop to be hit?