Protecting Yourself From Reversals



Whenever Happy Pip goes swimming, she always wears her hot pink rubber or ducky floaters, to be safe. Rubber ducky floaters are life savers. 

Every time she trades retracements, she uses  stop loss points. Stop loss points are capital savers. 

As we mentioned before, reversals can happen at any time. Retracements can turn into reversals without any warning.

This makes using trailing stops in trending markets very essential. With trailing stop loss points, you can efficiently stop yourself from exiting a position too early in the period of a retracement and exit a reversal in a pinch.

Conclusion

You don’t have to lose all those pips. You don’t have to be shot down by the “Smooth Retracement”. And you most certainly don’t need to wear arm floaties.

Just make sure to  know how to differentiate retracements from reversals. This is portion of growing up as a trader. Having the ability to do so will effectively lessen your losses and avoid winners from becoming losers.

With lots of practice, experience and knowledge you will find yourself being able to trade accordingly to retracements and exit with a profit many time than not.

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