My "triple homicide" stoploss rule.
I rarely get fully stopped out (without looking to re-enter) until:
- technical setup dies
AND
- fundamental structure dies
AND
- catalyst/narrative disappears
If all three of those don't happen, 99% of the time I'm getting back in (esp if narrative is still strong/alive)
I get stopped out ALL the time from a technical level breaking...but if the rest of the picture still looks good, I'm looking to reassess and re-enter nearly every single time.
I see people get stopped out on the technical side and think the trade is over forever. But you respected risk, you're now flat, and can think with a perfectly clear mind.
1) did price change?
- cool, it happens
- reassess
- build a new entry plan
- define new risk
- don't be afraid to get in again
2) have fundamentals changed?
- no? perfect.
3) has the story/catalyst disappeared?
- no? perfect
One technical stopout rarely kills an entire opportunity by itself.
It's like Babe Ruth taking one strike and never picking up a baseball bat again.
I’d rather let the market kick me out vs just trying to guess where to get out. I very rarely take profits into strength, I just get stopped out higher and higher. So the market decides when I’m out, not me...trying to pick the perfect spot to take profits on winners is the best way for me to sell way too early. I just keep moving stops up incrementally as the trade continues to work. Helps me catch + stay in the biggest moves.
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