Question for traders who develop strategies for trading. I am sure most of you must have faced this challenge in Forex Trading. I am hoping to hear different perspective and opinions from different traders on this subject.
So here is a scenario:
Let's say you take a Buy Trade. Your TP is set to 30 pips. The market starts to go against you. Based on your strategy when the market is 30 pips against you, you would like to take a Sell Trade of 3 times your original Lot Size while closing your original Buy trade. If the direction continues, you get out of the Sell Trade making some money or at the least break even by recovering the 30 pip loss you had from your original Buy Trade.
All looks good in theory.....but I have experienced in quite frequently that you do not get the opportunity to enter or exit the Trade at the right time. The Market just moves very quickly.....I have noticed it would many times move 100 pips in a single tick. This means you never got the opportunity to close your original Trade at 30 pip loss and open new Trade in the opposite direction. And now you are at 100 pip loss.
How do you handle this sudden movement and gap in the price?
So here is a scenario:
Let's say you take a Buy Trade. Your TP is set to 30 pips. The market starts to go against you. Based on your strategy when the market is 30 pips against you, you would like to take a Sell Trade of 3 times your original Lot Size while closing your original Buy trade. If the direction continues, you get out of the Sell Trade making some money or at the least break even by recovering the 30 pip loss you had from your original Buy Trade.
All looks good in theory.....but I have experienced in quite frequently that you do not get the opportunity to enter or exit the Trade at the right time. The Market just moves very quickly.....I have noticed it would many times move 100 pips in a single tick. This means you never got the opportunity to close your original Trade at 30 pip loss and open new Trade in the opposite direction. And now you are at 100 pip loss.
How do you handle this sudden movement and gap in the price?