The support forum is built with (1) a Q&A format for common trading queries received from wannabe and experienced traders, and (2) a standard forum for course video topics. How to Trade Price Action and How to Trade Forex Price Action videos are consolidated into common forums.
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Hi, when Al talks about were he puts his stop, does he put the stop just 1 tick below/above the price? Or does he allow a little more space?
If you're asking about stops to enter trades then he always talks about entering trades just 1 tick/pip above/below the price.(Although, since I don't trade E-minis, I sometimes allow a little more space to make sure that I don't get stuck into a bad signal as false signals are quite common in the markets I trade due to higher volatility).
However, if you're talking about stops after a trade is taken, maybe someone from Al's trading room can answer this question better but so far to me, it seems like he may be putting stops in his head and not placing it. If you continue with the videos, there are many instances where he says that the triggered stop does not result in a reversal of the trend and the probability is just 50-50 that a reversal will take place(and correspondingly the trend will resume). There are occasions when he says that even after a stop is triggered, traders enter the trade once more in the original direction or don't exit the previous trade at all in the first place and just use a wider stop.
So, there perhaps is a decent possibility that one need not place the stops unless there is a good chance of increased volatility in the markets and it would be unsafe to trade without stops. Someone more experienced on this forum could answer this better.
Stops both for entering or exiting go one tick beyond the given point, for instance, 1t below the SB, 1t above the BO point, and so on. Also, one of the most important things is that your stop has to be in the MKT (this is the main takeaway from videos 33 about protective stops) tho there are several strategies you can follow, including tighter or wider stops, as Abir said, but all of them include having a stop in the MKT always (trading with OCO bracket orders).
Rewatch videos #33 for further details... don't go ahead without that because stop placement is part of trade management and without the correct management the chances to lose money in the MKT are 100%!
I see. I didn't reach video 33 yet. However, how would one manage situations where the stops are flexible, for example further entries in case of MTRs? Exit the position and re-enter again? If it has been discussed in further videos, then I will watch those videos with even more focus. There are instances where Al says that a trader might not exit a trade after a stop is triggered as they are expecting a reversal still, how would one go about managing their positions there? Your insights would be helpful, ludopuig. Thanks!
Using wide stops and adding more contracts where other traders are exiting is one strategy, exiting and re-entering at next signal is another. All these stuff is well explained along the course so better you watch the related videos and then, if you have any questions, we can help here.
Sure. Thanks a lot! That was very helpful.
Al also includes the option to early exit before the stop is hit, as summarised in the attached extract from his list of accronyms. 😀
Yeah, there clearly are a lot of things left in the course and I am still in Climaxes(29). So, I guess I will focus a little more on learning the material first rather than commenting here as I don't know most of the things yet.