You trade price action, you go long at the previous support level, you have a mental stop and not a hard stop. Price starts to move in your favor. Then a news item comes and price makes a huge move against you moving past your stop, do you immediately get out or wait for the price to stabilize?
Greetings, In my opinion you must play your own game. You don't know what is going to happen next. Therefore your Trading Plan must call for all the usual contingencies before you execute the trade. You must know the odds or your play before you place the trade. If you are sitting at the "trading table" trying to determine who the sap is...guess who is the poor sap? The true professional only plays with the odds in their favor. KDASFTG
As a price action trader, I think it's important to know in advance what you will do. I don't use mental stops, but if I did, I'd still place a disaster stop in case of any sort of disaster (platform failure, connectivity issue, PC crash, unexpected news, rumors, etc.). If I didn't use any sort of stop and the scenario you describe occurred, I'd place a hard stop just outside the new high/low that printed on the initial reaction. I (and a helluva a lot of bots based on what I've seen) often enter a new with-trend trade in the direction of a break by placing an initiating stop order just outside the high/low that prints on the first significant move, so more often than not if that level breaks there will be more pain if you're on the wrong side of it. Just curious, but if you go long at support, why wouldn't you place a stop loss below support?
I agree with all the points the long-legged (no)Doji makes. But I really don't understand why so many people on this board have such a hard time taking reasonable losses and reevaluating and reentering on whatever is then deemed as the correct side. Fear of commission? To be fair, the OP did not say whether the news was expected or exogenous, but I just don't get it. Anyway, the OPs question of "what to do?" Here's my take... if YOU were an auto-trade system, what would the program that YOU wrote and have complete control of do? Think about that. Trade On!
Do not think⦠do not pass go â get the hell out Price did not do what you thought it would â for whatever reason Fwiw, Iâve seen some really big moves start this way⦠and it ends up being days / thousands of K before price stabilizes F that ================================== On a different note, call me curious What was this ânewsâ What time did this ânewsâ occur On what basis are you surmising price dropped because of this ânewsâ If it was during lull time, someone could simply have farted and price could easily rip the other way RN