Finding the real support

Discussion in 'Trading' started by andiecpk, May 21, 2004.

  1. andiecpk


    Hi, I have a question on finding the support on a chart.

    I used technical analysis to find my support (entry point). However, it happened that my support was broken and went $0.10 below my stop. Of course, my stop loss order got executed. Then, the "real" support found at $0.10 below my stop and rallied to make new high.

    My question is, how should I determine if my support is the real support? Or, should I give myself some cushion as to set my stop a couple of cents below the support? If yes, how much cushion is appropriate?

    I appreciate all comments and suggestions. Thanks.