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TTR after a tight bear channel. I expected the price to continue lower, so I decided to tp1/3 and hold the position. My reasoning was that after the TTR, the probability still favored at least one more leg down, so I wanted to give the trade room to work. However, the bulls then produced a strong breakout that hit my breakeven stop.
Should I have kept my stop above the swing instead of moving it to breakeven? Was moving my stop to breakeven here a mistake?
You bring up a very important question, and critical to success: when does one take profits?
A large profit should not become a loss. Your initial trade suggested capturing a downward trend. This succeeded! However, when is the trend not trending?
1. One might determine when a trend has become more of a trading range behavior (change of character) and take profits at the retest low.
2. One might use a measured move of risk and 1:1 for 60% probability is profitable.
3. In this case 1:2 risk/reward was probably available.
4. Always in changes the game. So if not on the strong bull reversal but the 3rd bar might also have been reasonable.
5. This pattern is a little more difficult because a major lower high didn't form so at least partial profits potentially may have been taken by an earlier rule.
Hopefully helpful and good trades to you!
thank you for your answer!
