 |
 |
| The most profound skill you can learn as a trader is knowing when you're wrong. Since you'll probably be wrong the majority of the time, you need to learn this quickly. It's your job on every bad trade to find an exit door that's close enough to your entry price to keep losses small. This requires a strong S/R level near the point of execution. If price violates it, you're wrong and you exit the trade. For example, you buy the pullback on COST near 76. You're long in a position above the horizontal congestion support just below your entry. Price starts to decline. Violation of the S/R means you're wrong. But how wrong is wrong? You might still want to manage risk and avoid a whipsaw by holding to the round number 75 or even the 74 breakout gap. Hint: most successful traders exit at the first sign of danger. |
|
|
