Trading Price Action Trends

Chapter 11

Late and Missed Entries

If you look at any chart and think that if you had taken the original entry you would still be holding the swing portion of your trade, then you need to enter at the market. The market has a clear always-in position, and you need to participate in the trend, because the probability of making a profit is high. However, you should enter only with the number of shares or contracts that you would still be holding had you taken the original entry, and you should use the same trailing stop. Your stop will usually be larger than what you would use for a scalp, and you therefore need to trade a smaller position to keep your dollar risk the same. For example, if you see a strong trend underway in GS, and had you taken the original entry with 300 shares you now would only be holding 100 shares with your protective stop $1.50 away, you should buy 100 shares at the market and place a $1.50 protective stop. Logically, it doesn't make any difference whether you are buying a swing-size portion now or holding a swing position from an earlier entry. Although it might be easier emotionally to think of the trade with the open profit as risking someone else's money, that is not the reality. It is your money, and what you are risking is no different from buying now and risking the same $1.50. Traders know this and will place the trade without hesitation. If they do not, then they simply do not believe that they would still be holding any shares had they entered earlier, ...