But it could also happen that the stopp isn't placed at the recent high. Let's say i put this parameter at 10... i get a signal and the EA places a SL on the lowest bottom that have occured during ten bars back. But what if the low have been 15 bars away.
Then we would have the problem that the SL isn't sitting at a natural low that have served as a good support level.
See picture #1(long scenario):
Yellow arrow: Entry
Blue Arrow: Ten bars back from entry
Pink Arrow: The lowest low during ten pips back from entry.
White Arrow: The more "natural" low during this retrace of the long trend.
I am no programer and i don't know if it is possible to program an EA that really put it's SL on more "natural" lows and highs but surely you can agree that this might be a problem and that we could get stopped out just because the price want to test a specific level one more time before taking off.
As said above i am no programer but could it work if we, in a long scenario, pinpoint the lowest low during the most resent downperiod of a Slope direction Line (attached) before the long entry?
See picture #2 (same scenario as pic #1):
The most resent downtrend in the slope direction Line (Blue/yellow line) before our entry is marked with pink arrows. If using this we would clearly have the stopp loss at the more "natural" low.
Just an idea... It most probably have is flaws as anything else but it work most of the time i belive.
Regards / JoLi