Quote:
Originally Posted by BullsAndBear
So i thought you were going to say get in at a 30% retrace of the previous bar so that you are closer to your stop, but i was wrong there i guess.
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I see this sort of thing quite a lot and it's caused by focussing on pips, not % of your account.
The only rationale for trying to trade a retrace of any particular PA pattern is to look to get in at a better price. It's irrelevant whether you have a 100-pip stop at the opposite end of a bar or a 50-pip stop at the same place but are looking for an entry half way along the bar's length.
Both trades should carry the same 1% -2% risk, it just means that your position size within that risk is larger if playing the retrace.
An alternative you might want to investigate is working out the overall lots you would be carrying if you were putting the whole 1% at the retrace entry and then splitting it into two separate trades. So, on a 6-lot trade you put 3 at the retrace and then look to add in the remainder once the retrace appears to be holding and price confirms the PA pattern as per Jim's teachings.
My 2 cents....