Overthrow Stop Placement Flashcards
1
Q
Is place to put stop clear from Technical analysis levels only
1 - Why is this good?
A
No
TA works, but the market price can also tell you where to put your stop - PRICE ACTION GIVES built in invalidation
1 - replicable process and it removes discretion
2
Q
What are great setups?
Failed …..?
Why?
A
Failed breakouts or failed breakdowns
Why? Trapped traders will force market violently the other way, (unwinding is often violent)
and stop loss is clearly defined by price action, whatever the deviation / overthrow is (place stop just above this if Risk reward balanced)
