PebbleTrader wrote:The only concept that is still a little "muddy" (unclear) is the "pincushion" concept.
You defined it as:
"The space between your purchase price and your position in the market"
When I look at the previous post chart (23 Nov 2010) with your example "4 Pip Pincushion", it doesn't seem to match that definition?
The box for the "4 Pip Pincushion" isn't drawn around the PURCHASE PRICE.
Is that what you describe as the LOS (Line on Sand)?
From the current price to your maximum risk level is your pincushion AT THE TIME OF the adjustment.
If price starts moving down then your cushion becomes smaller and that is what is being shown in that picture; you had a 10 pip cushion, you lost 6 pips, and 4 pips of cushion remain.
If you expand, 5/4 etc, then your cushion becomes larger.
If you contract, 5/6 etc, then your cushion becomes smaller.
Your position, the price you consider yourself long/short from, is your maximum exposure + any space gained.