Chart analysis on copper pt.2

In my last post on copper I described the situation with my open trades. As you can see in my eToro portfolio history and news feed I managed to close both trades with a small profit. After gaining confidence on my chart analysis skills I opened a sell trade with leverage of ten on September 13th. 3 days later I lost 31,5% (trade is till open)! Time to analyze...

My major and most obvious mistake was not setting a tight stop loss. When opening the trade I kept the limit proposed buy the trading system, which was 50% of my invest. In most literature I read about trading they recommend a stop loss between 5...10%. If I followed that rule I could have saved a lot of money. Of course the leverage of 10 also contributed to my misery.

In order to learn from my mistakes I analyzed the chart again and checked for different indicators. The chart below has a 4h basis and shows several indicators. On September 13th I decided to open a sell position based on two indicator signals:

1. There was a plateau near (but not at) the upper bollinger band, which is an indicator for a trend change
2. The stochastics fell below 80, which is supposed to be a strong signal in a market with mainly lateral movement (compared to the chart before market seemed to move laterally)

If I consider more indicators I now find the following:

1. copper crossed the 50-period EMA on September 12th, which is a "buy" signal
2. The MACD was positive with a positive trend -> "buy" signal
3. ADX was weak, slightly on "sell", but turned to "buy" the day after

Considering all those signals the indication for "sell" were weak. 

Now the question is: What do I do with my open trade? Hold, assuming copper will drop again risking even higher loss? Or close, actually losing 31,5% of my invested money but avoiding further loss? (remark: losing nearly a third of my investment means I need a 50% gain on the remaining equity to make up for the loss!).

Here is my chart analysis for today:

1. The 50-period EMA (red line) is about to cross the 200-period EMA (green line); this would be a "buy" signal
2. MACD shows a low trend that just turned to "sell"; no divergence found
3. The RSI is following the market and is not showing any divergence; today it fell below 70, which is considered a "sell" signal
4. The Stochastics also shows a weak "sell" signal, since the %K-line (black) crossed the %D-line (red) today; it is still above 80 but on a downward trend
5. ADX: trend is weakening but still strong on "buy"
6. Bollinger band: again a plateau-like pattern that started on the upper bollinger band; the distance to the upper line is increasing; overall a slight "sell" signal

Summary: According to 2 indicators I should close the trade, 4 indicate to hold the position. In order to get a better feeling for the market I checked the chart on a 1d basis:

1. Bollinger band: Upper line goes down, copper crossed that line -> "sell" signal
2. 50d EMA shows slight upward trend but is still below the 200d EMA -> neutral
3. MACD crossed the signal on September 7th and the trend strength is increasing -> "buy" signal
4. RSI is following the market, currently at 60.44 -> neutral
5. Stochastics: above 80 but %K-line is still above %D-line -> "buy" signal
6. ADX: trend is weak but positive -> "buy" signal

Summary: Only bollinger indicates a down trend, the others are neutral or on "buy". 

The following chart is also on a 1d basis but shows a longer time period. It shows a general downward trend of copper and a support that started in January 2016. Currently copper is right between those trend lines. If the current uptrend keeps its pace it could break the upper trendline on September 21st at $2.2072 - way above my current stop loss.

My conclusion of the above analysis: Copper won't come down to the opening rate of my trade, but due to the signals on the 4h chart I am optimistic that I can reduce my losses at the beginning of next week. So I keep the trade open without change in stop loss and will carefully analyze the charts again on Monday. Depending on the opening behavior a trailing stop loss could be an option here.