When will you exit?

Assume you are using 5 min bar for trading. The current price is touching your stop loss. Will you wait until the bar finished to exit? Or will you exit immediately?

 

exit on price. who cares where the 5 minute (or 10 or 30 or whatever) bar is at.

 

Yeah, what he said.

 

To expand on this. Imagine the following two situations.

1) You are long and your stop is hit at the open of a 5 min bar. The market then slides 20 points before the end of that bar. Doesn't make a lot of sense to wait for the end of the bar before closing.

2) The same stop is hit at the beginning of a 5 min bar. The market then reverses and closes well above your stop. What do you do in this case? Do you still close out because your stop was hit, or now not close because the market is now above your stop. Whatever your answer is, this can and will (particularly for a newbie trader) lead to very bad habits in second guessing your stops. ("Well, I didn't stop out last time because..........and it worked" etc etc).

Bottom line (IMHO). The stop is paramount. As soon as it hits, you should be out of there faster than an Australian when it's his turn to buy the next round.