I had a short USDCAD this morning, it has moved favorably and gave me some early pips, I got giddy so I fudged and fidgeted with the stops. I thought that moving the stop to breakeven would make it a safe trade.
Later on, Yes! it did make my trade safe, it closed it when the price moved towards the resistance line just above where I had my stop. I had my previous stop slightly above that line but I moved it to break even with no regard for where the price will go.
I guess making the trade safe(breakeven) was not so safe. Now I am out of the trade and the price has moved again supposedly in my favor.
If you would look at the chart above, the small reddish circle is where I got stopped out of my short trade. See where the price is at the end of the chart. Arrrgh!
Lesson #1,000,001 - always place your stops at logical places. Meaning slightly above or below the resistance or support lines. Resist the temptation of moving it at breakeven when the price has moved in your favor, wait when the chart has established a new support/resistance level. That is when you move your stop.
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