Sometimes you can rant about why there aren’t systematic trading stops on the SGX. These nifty perks enables u to get out with how much you want to lose. but in the case of my straits asia trade, you really hate it when u violated your stop loss.
its a good lesson to me that trading against the trend can be dangerous. I did not notice that the trend for straits asia have changed. although the MACD looks like its possible that its gonna cut above 0, the price movement have already cut the long term moving average.
I was suppose to cut the trade at 1.99 but were unable to do so as i was doing some stuff at work at that point. came back and realise that the correction was in full flow. luckily i did not deliberate further if not i will be cutting at around 1.89 . all in all 8% loss.
The good thing was at least im taking a smaller sizing in position since im weary of the recent possible change in trend. If not the loss would be much bigger than this.
The lesson learn is that your stop loss target should be flexible and not a %. Rather it should be based on the anticipation of how wrongly your trade can go and where you should take up counter measures. So if its about a bounce off moving average or bottom of an envelope, when it doesnt happen, it could be high time you make a run for the exit.