Assuming minimal slippage on the stop, is it general practice to update stops when you notice profits you don't want to see wash away. For the past hour I have been playing with a demo account to observe my emotions and analyse the way I react to greed and fear. What I found was that I 'expected' to risk up to 2% of my capital so I wasn't overly concerned about fluctuations in this zone on the 10 second chart, however when I found that I had moved more that 2% above my opening position I was constantly inclined to update the stops.
Before I opened the demo account I would have expected that I would look for signals indicating reversal. When the trade is moving however I'm want to erect walls around my position by covering myself with stops.
Is this at all useful at relatively arbitrary values? Should I go back to study and look for local support \ resistance levels?
Before I opened the demo account I would have expected that I would look for signals indicating reversal. When the trade is moving however I'm want to erect walls around my position by covering myself with stops.
Is this at all useful at relatively arbitrary values? Should I go back to study and look for local support \ resistance levels?