A common mistake traders make is to arbitrarily place stops without respect to the market’s price action or movement. A trader will risk arbitrary amounts such as $200, $500, or $1000. Where do these numbers come from? They are arbitrary. In reality, market conditions vary from trade to trade, time to time, day to day, and market to market. Nothing is fixed. That’s why traders enjoy an advantage when they let AbleTrend show them the placement of optimal stops, which are defined by the market price and action itself. Here is a recent chart showing support and resistance levels which stop placement based on with AbleTrend Guidance chart.
Where should we place our stops for the most protection? It’s easy when we place our stops at logical levels as dictated by AbleTrend. AbleTrend T2 support levels indicate supporting floors for buy positions; AbleTrend T2 resistance levels indicate resistance ceilings for the selling positions as show in the following chart. AbleTrend stops shall be placed at 1.5 to 2 levels away from price below the T2 support levels for buy position depend on your risk tolerance; AbleTrend stops shall be placed at 1.5 to 2 levels away from price above the T2 resistance levels for sell positions depend on your risk tolerance.
AbleTrend dynamically places and moves stops according to the market. What does the market tell us? The current price scale and range tells us the probable price range in the near future. The current price trend tells us the probable market direction in the near future. AbleTrend is designed to use the market’s own predictions to place stops – or put another way, it places stops by a process of calculated reasoning.
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With Warm Regards,
Grace Wang
AbleSys Corp.
gracezh@ablesys.com