I HAVE A QUESTION WITH RESPECT TO ROLLOVER IN FUTURES AND STOP LOSS
I AM LONG SBIN JULY 12 CONTRACTS.
ENTRY PRICE = 2200
STOP LOSS = ENTRY PRICE MINUS A MULTIPLE OF ATR
INITIAL STOP LOSS 1 = 2100
LETS ASSUME THAT ON THE DATE OF ROLLOVER,
SELL JULY 12 CONTRACT
EXIT PRICE = 2300
TRAILING STOP LOSS 1 is at 2200.
ON ROLLOVER DATE,
BUY AUG 12 CONTRACT,
ENTRY PRICE = 2300
LETS ASSUME, INITIAL STOP LOSS 2 = ENTRY PRICE MINUS A MULTIPLE OF ATR = 2250.
WHERE SHOULD BE THE STOP LOSS? SHOULD IT BE AT
INITIAL STOP LOSS 2 (2250) OR SHOULD IT BE KEPT AT 2200 (TRAILING STOP LOSS FOR JULY 12 CONTRACT)?
IF I KEEP IT AT 2200, I WILL BE DECREASING THE RISK REWARD RATIO.
IF I KEEP IT AT 2250, I WILL BE INCREASING THE CHANCE OF GETTING STOPPED OUT.
PLEASE HELP ME OUT WITH THE LOGIC.
THANKS
I AM LONG SBIN JULY 12 CONTRACTS.
ENTRY PRICE = 2200
STOP LOSS = ENTRY PRICE MINUS A MULTIPLE OF ATR
INITIAL STOP LOSS 1 = 2100
LETS ASSUME THAT ON THE DATE OF ROLLOVER,
SELL JULY 12 CONTRACT
EXIT PRICE = 2300
TRAILING STOP LOSS 1 is at 2200.
ON ROLLOVER DATE,
BUY AUG 12 CONTRACT,
ENTRY PRICE = 2300
LETS ASSUME, INITIAL STOP LOSS 2 = ENTRY PRICE MINUS A MULTIPLE OF ATR = 2250.
WHERE SHOULD BE THE STOP LOSS? SHOULD IT BE AT
INITIAL STOP LOSS 2 (2250) OR SHOULD IT BE KEPT AT 2200 (TRAILING STOP LOSS FOR JULY 12 CONTRACT)?
IF I KEEP IT AT 2200, I WILL BE DECREASING THE RISK REWARD RATIO.
IF I KEEP IT AT 2250, I WILL BE INCREASING THE CHANCE OF GETTING STOPPED OUT.
PLEASE HELP ME OUT WITH THE LOGIC.
THANKS