Now my problem is the volatility has really caused me to struggle with it. Closing out good trades too soon because sharp rallies frighten me out, getting stopped out of good trades because my stops didn’t allow for the powerful retraces we’ve seen, or just getting it wrong and ending up with a loss.
Thus I’ve ended up with lots of small profits which are totally eradicated by the few losing trades.
The trend on this Index has been down for almost 2 Months, whilst other Indices aren’t necessarily validated down trends and its unlikely they’ll totally stop correlating with each other.
So my dilemma is – what do I do?
Well, whilst typing this I’ve already decided to close £5 of the trade at 17,517 to take 43 points which is a decent profit for the day (£215)
So for the final £1 I can either:
Put stops at break-even (I think this almost certainly guarantees a break-even stop out)
Close the trade (There’s a fair amount of positive MACD divergence suggesting a higher move will come, and the 4 hourly 200 MA is above today’s high and likely to get tested).
Or, I can put stops just above this down-trend line:
What option would you go for?
If the trend is now down (to be honest, my gut feeling says it isn’t), there’s a potential 500 points profit just for a double bottom.