EXCEPTIONS ARE OK SO LONG AS THEY DON'T BECOME THE RULE
While we do not make it a rule to adjust our stop-losses wider, there are always exceptions to every rule. In certain markets, I will make an exception, as I had had done a few weeks back in Usd/Cad (removed the stop which would have been hit and ended up exiting the position at cost). At the same time, I will make sure to keep a close watch on the position so that it does not deviate too far from the original exit strategy. Using a rule based system of some form helps to guide us to proper and sound trading decisions. However, when trading, there is also an element of instinct and intuition that a trader must be willing to rely on if the situation arises where it is necessary. In summation, exceptions to rules are appropriate so long as the exceptions do not become the rule. The trick is…to be honest with yourself.
Written by Joel Kruger, Technical Currency Strategist for DailyFX.com
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