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The 50 Pip Rule
Generally speaking the best way for me to trade and sleep well at night is to take money off the table at a sensible support or resistance level and go to sleep with no position. This does not always happen but it is a worthy goal to have when thinking of targets. Last night was a good example. I initially shot for a target that was over 120 pips away, knowing there was a good support level at 1.0170. When price took out stops below this level and started to rotate higher, I knew that the trade was over – certainly if I wanted a good night of sleep.There is nothing wrong with taking profits early and people who religously stick to their stops and targets often do themselves a disservice by ignoring price action.
Going forward I will try to keep my targets within a 50 pip range and may have my stop an equal distance away. I don’t intend to publish the details of each trade and will vaguely allude to my position if I feel the need to. Remember being a day trader is not about milking every pip out of the market but consistently taking small chunks out of the market.
2012-09-05 16:40:03
Source: http://marketletters.blogspot.com/2012/09/the-50-pip-rule.html
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