AbleTrend Support/resistance dots show you where to place protective stops as a defense measure to preserve gains or limit losses. AbleTrend S/R dots are principle-based “intelligent” signals – they are defined by the market’s own support and resistance levels.
Optimal stops can be placed below the AbleTrend support dots for buy position, and optimal stops can be placed above the AbleTrend resistance dots for sell position.
One of the criteria in selecting a good trading system is that if the system has a built-in dynamic stop system. As Warren Buffet puts it "Rule number one in investing is don’t lose money; rule number 2 is don’t forget rule number one."
Any trading software can suggest stop-placement, but you should be aware that the type of stops that you use could determine if you win or lose. You should never feel comfortable, using arbitrary stops.
"should I use a 3% loss stop or a 5% loss stop?", this is a typical question from traders who are using arbitrary stops. You should never feel comfortable using arbitrary stops. Instead, AbleTrend stops are principle-based. —They are defined by the market's own support and resistance levels. They are the new generation of intelligent stops.
AbleTrend S/R dots are dynamic and automatically adjusted by the software as prices change. A built-in feedback loop retrieves the data for market direction, price range and momentum. Because the stops are determined by actual market conditions, they are objective, reliable, back-testable, and safe to use in real-world trading.