A very interesting strategy that allows you to enhance the effect of having a loss-cutting system. We pay attention to this interesting strategy. In combination with stop-loss orders, you can get very attractive trading strategies. The idea is that you don’t know in advance what the price will do when your bid is set below the current price. And the price is likely to continue to fall and even very quickly. By placing a take profit bid in a long, you let the price fall through the cracks, but after reaching the bottom and starting to move up by the amount you set for the price step, your bid will open from the very bottom of the movement! Wonderful, isn’t it? This strategy is especially effective with the so-called knife fishing, when you are trying to enter the end of a sharp downward movement during a strait or a shot. The only problem is that at the end of the strait there may be strong price twitches that will make you nervous. Let’s consider examples of placing take profit orders in the Transaq trading terminal.
Fig.106. Sberbank JSC share.
Fig.107. Take profit application to Figure 106.
Suppose the situation for the Sberbank JSC stock looks like in Fig.106 and you would like to buy shares as cheaply as possible not more expensive than the price of 123 rubles, allowing the price to reverse by 3 rubles. For an example of filling out the application form, see Figure 107 on the left. If the price starts to fall, for example, to 118 rubles, and then rises by 3 rubles, you will purchase 1 lot of Sberbank JSC shares at a price of 121 rubles apiece (or so, the market application). If, on the contrary, you want to sell 1 lot of Sberbank shares at a price of 130 rubles or more when the price is rolled back by 3 rubles, then the application parameters will be as in Fig.107 on the right. I.e. if the price rises to 136 rubles, and then gives a rollback to 133 rubles, you will buy 1 lot of shares of Sberbank JSC at the price of 133 rubles.