In this example, I used a Bearish Trend in which an attempt was made to reverse the direction of the market when the previous Lower High was broken. I took advantage of this situation by entering a position when the price broke the previous Lower Low. This is because there was a confirmation of the previous trend.
To manage risk effectively, I implemented a Stop Loss at the level of the preceding Higher High. This precautionary measure ensured that any adverse price movement beyond that point would prompt an exit from the position, safeguarding against substantial losses.
Regarding the exit strategy, there are a couple of options to consider. One approach is to wait for a breakout of the previous Lower High or Higher High, which could indicate a shift in the market's direction. Alternatively, one can set a Profit Factor of choice, taking into account factors such as profit targets and risk tolerance.
The choice of exit strategy ultimately depends on individual preferences and the specific trading timeframe in use.
To manage risk effectively, I implemented a Stop Loss at the level of the preceding Higher High. This precautionary measure ensured that any adverse price movement beyond that point would prompt an exit from the position, safeguarding against substantial losses.
Regarding the exit strategy, there are a couple of options to consider. One approach is to wait for a breakout of the previous Lower High or Higher High, which could indicate a shift in the market's direction. Alternatively, one can set a Profit Factor of choice, taking into account factors such as profit targets and risk tolerance.
The choice of exit strategy ultimately depends on individual preferences and the specific trading timeframe in use.