Exit strategy #7 (Leaving intra-day trades overnight)
Submitted by Edward Revy on November 12, 2009 - 14:42.
Intraday trades are normally closed during the day. However, some traders may choose to leave certain trades overnight, which rises a question: how to protect your open positions overnight?
Option 1: allow an Expert Advisor to manage your trades.
Option 2: Leave everything as is and go to sleep. Your trade must have a stop loss. Setting a profit target is up to you.
Option 3: Never sleep, wake up every hour or so.. hmm..
Option 4: If a trade made some profits before the bed time, set your stop loss to breakeven and leave it overnight.
Option 5: Use a trailing stop.
The method I'm going to describe uses a simple well known Parabolic SAR indicator.
Preferred settings (0.1, 0.11) for all time frames.
When leaving a trade overnight, set initial stop loss at the most recent Parabolic SAR dot.
The step of the trailing stop = the distance between the two most recent Parabolic SAR dots at the moment.
Evaluate PSAR (0.1, 0.1) and (0.02, 0.2), whichever shows a greater distance at that moment will be used for calculating a Trailing stop.
That's it, if a trade has something to offer, you'll be there to grab it, otherwise your trailing stop will help you exit when the time is right.
Don't lose your sleep over Forex!
If you know alternative options, you're welcome to suggest!