Well ... get the f*ck out!
That's what scalpers do. If a trade moves against me 1-2T or so, I'll often just exit. If it didn't turn out exactly the way you anticipated it in the first place - why linger? More often you're better off stop-reversing than holding.
Or as Mark / velocity_trader put it: "If the next tick doesn't go my way, I'm out..."
Unless you've traded like this, you couldn't even conceptualize the amount of profits you can save yourself thinking like this. I know, most people just say: "Oh, why use such small stops? Oh, it's just noise, anyway..." etc etc.
Well, this is exactly not the point. The point is not what you think what is or what isn't, and what is noise. I'll explain why:
The only point is the movement on the price chart.
1) And once price goes down, no matter how little, there will be [guaranteed] others wanting to get out before it goes down further.
2) So it goes down another tick.
3) At the next tick, even more people get nervous, and close out, adding more sells into the soup. Logically, reds starts rolling through.
4) Now the inside bid starts shrinking all of a sudden, and the inside ask grows, because they're really getting worried now.
5) They sell more, and price continues down.
6) Direction has changed.
7) Stops (dumb money) are getting hit, continuing the direction even faster...
Now, this said, IMHO, if you've reached point #3, it's already too late. You need to get out at #1 or #2, or you'll be lucky enough getting out in the stampede. It's the good ole chaos theory domino effect. Dont' let it work against you.
That's the whole 'secret' to trading; Trading isn't about charts, trends, supports, or sentiment.
Trading is about being the first in the door, and the first out the door. Period.
Never linger. Always have your foot in the door and ready to bolt. That's what I do. Nothing else I've ever tried works as well.
Happy Trading!
