This is how I entered the market based on the bearish engulphing candle we spotted earlier.
At the close of the candle I placed a sell stop order just below the low of the signal candle. Of course I did use a stoploss and my lot size was small enough to keep the risk to the account well under 1%. So the idea is that the candle would be a strong signal and that price would continue to move down, which is what happened. Today I saw that my trade is in profit and I have moved my stoploss towards the current price. This has effectively 'locked-in' profits and I will continue to move my stop if the price continues to move down.
I could of course also simply close the trade now and book the profits at the current level. There are as many ways to manage a trade as there are traders. Another way some people use is to close a portion of the trade and then trail price. You will have to find out what you feel comfortable with. The method I am using gives the trade potential to run into higher profit than if I chose to close it at any given point, the trade-off is that I will lose any of the pips between the current price and my stoploss when price does stop me out.
