Tuesday 7 November 2017
Stopped out at price, 425
6 Nov – Buy 429.5
7 Nov – Sell 425.0
Loss = 4.5 cents $225 plus $15 commission per contract.
The money stop in Dec was our look at how price failed to follow
through to the upside and had declined under the high volume
rally bar, erasing the upside effort. Sometimes, a stop is given
wider latitude which increases the risk. The decision was to not
give more room when price has yet to prove itself after entry.
When the stop was triggered, it was on a sharp volume increase,
and the close of the bar was near the high, typically indicating
buyers. One can never know how price will develop, as we did
not in pacing the stop. After the fact, it appeared there could be
support, so we re-entered in Mar 18.
Stops are an art form, not something that is formulaic in application.