Why do we use intelligent responsive bars to pick all our levels? Why not just have a fixed stop loss and take profit distance?
It’s because you trade off the charts and it’s easier to see which levels you want these important levels to be at. Sure, it shows you the number of pips that your stop loss/take profit has, but what is more important is how these levels look on the entire chart, right?
Not sure what I mean?
Well imagine this: You have a strategy that tells you to set a take profit of 100 pips. If you use a standard approach of just placing 100 pips, you turn a blind eye to what the charts are telling you and that is very very dangerous.
What if your 100 pips take profit is 5 pips higher than a major swing high that has not been successfully passed for the last 3 weeks? Wouldn’t it make more sense to simply have a 95 pips take profit in this case? Why risk the entire profitability of a trade for 5 pips?
Because of this, it’s always better to reference the chart when placing your key stop loss/take profit levels.
Below is a picture example of what I mean: