Post of the Day: Stop Placement

Power Course Instructor’s Response:
Ideally, in this example, we would want to place our stop above the top of the long wick and enter the trade on the open of the next candle. Another entry strategy on this pair would be to drill down to a 1 hour or a 4 hour chart to see if an entry in the direction of the trend on a shorter time frame would work. Stops will not necessarily be as deep on the shorter time frames. Keep in mind that whatever chart is used for stop placement, a stop should not be placed at such a point that, if triggered, more than 5% of the trading account would be lost.

Also the pair is in a downtrend on the Daily, the RSI is showing bearish momentum, and there is a long wick. No guarantees, but this would be a higher probability entry.