Have you ever entered the market, when the market did not go as expected, and your heart began to fluctuate, should you take the initiative to stop the loss or continue to hold it?
So when we open a position and enter the market, if it does not go as expected, how should we deal with it? Consider the following example:
figure 1)
Point A is a new low forming a new support level.
Point B is the rebound high after the new low, forming a new resistance level.
At point C, there is no new low, and the low point is raised, which is in line with the basic characteristics of the rising structure.
There is also a small hammer line that stops falling at point C and a rising middle-yang line is established, which can be an aggressive entry to go long at point 1, and the stop loss is set below the lowest price at point C.
After entering the market at point C, we hope that the price will break through the previous resistance level and the horizontal resistance level at point B, so that the upward trend can continue, but the price rebounded to the resistance level but did not form the expected breakthrough. How to deal with the entry position at this time?
First of all, we have to examine whether our original reasons for entering the market have changed, mainly from two factors:
1. Trend structure
2. K-line form
We enter the market at point C, and the price rebound to point D is blocked by the previous resistance point B. At this time, the price pattern is trough A and trough C, and the low point is still raised in a small upward trend structure, so the rise is still Not destroyed.
Let's analyze the price changes from the K-line feedback of the structural point. The price tests the horizontal resistance level at point B, and the K-line at point D is not very bearish. The upper shadow line indicates that the lower party has a strong bull force and is buying, but a new long buying point appears at point E.
Because the structure point C is the critical transition point of the long and short trend structure, so as long as the price does not fall below the structure point C, the upward structure will remain unchanged, and we will continue to be bullish.
Finally, we summarize the tracking and processing after entering the market. First, look at the trend structure, and observe whether the high and low points of the price have reversed. Second, look at the detailed K-line shape, whether the strength of the short K-line is strong or the K-line of the bulls. The line is strong, so as to predict in advance whether it will impact the original trend structure, and then affect whether we need to take the initiative to leave the market or continue to hold orders.
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