Stop-loss Exit

With this stop-loss method, first ensure that the conditions of my trading strategy are applied... set the “initial” stop as suggested earlier using the SAR indicator as the stop level.

You must have at least this amount of protection when you enter into a trade… the worst happens when you least expect it, NEVER trade without a stop loss!

Right, now that we have the SAR stop in place, we are going into manual trade management mode…what is that you ask? Watch the video below!

Right, listen carefully, once the trade gets going in your direction (let’s say “UP”, opposite to above video) then the price or candles will in most cases “close” above the 8MA, keep trading until one violates this rule i.e. price closes below the 8MA (moving average)

When the above happens, wait and watch for the price close of the next following candle, if this one also “closes” below the 8MA you have two choices take your profits and run… you can always get back in again, subject to the trend being intact, RSI is in the bullish territory with an “UP” SAR signal.

If however the first violation is something like a “SIP” with a price “close” near or below the 20MA then close out the trade immediately!

I would like to reiterate and clarify a very important point that you could easily over look.

Remember, I said that the price or candles must close above the 8MA… yes, you must only action this when the price or candle closes above the 8MA and do nothing if it is just trading below the 8MA… wait for it to finally close!

Do not second guess! Or you will be terminating the trade prematurely!

The other important thing that you must do is to move the “initial” stop loss in line with the SAR indicator as the trade progresses – this is a safety net!

To me this is the very best stop-loss exit method of trading and highly effective.

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