STOPS (Do You do the Do? Does Size Matter?)
So I have a love hate relationship with stops and I've been thinking about it today and I need to be more comfortable with stops. Doubling down where you would be stopped out is not a solution - it only adds more risk. I've heard than some traders use mental stops, but for me it seems like when a price is hit and that is my mental stop, everything looks great and I want to add more rather than get out. Needless to say I'm training my mind that stops are good. Usually, even if they are pretty far off the price they would save a major loss, like some breaking news. I'll be talking about stops more as I progress I'm sure. I guess my question to the masses would be - Do you use them always or in certain situations? And if you don't use them all of the time, what are the situations where you do use them? I feel like setting stops should definitely be a thing, but I also think that setting a properly located stop is of the utmost importance (along with well timed entry) and can be very nuanced. Maybe I'm overthinking it. See a level, use the level - let the market do it's thing. eh? I've got more to say, but it will have to wait. I used a mental stop on one trade today and an actual stop on another and I think they were both good trades, not because I made money on them, but because they were well thought out. I did have a mental stop on the trade that didn't have a stop and I technically I would have been wicked out of the position (so either my entry wasn't great - what I think was more of the problem without going into detail, or my mental stop was a tad too tight, or both). Interested how others handle this whole stop situation. I feel like I should re-read the books I've read and focus on one thing at a time - next time, what everyone says about stops. My general feeling is using them keeps you in the game longer. Using them right (well placed) and you find success in the game. I'm sure there are other details that are important but yeah.... Do you place the stop or just think it into existence? Does size matter in the likelihood of a stop being run? Sometimes it feels like if I trade with a few hundred dollars, no one or thing will car about hunting my stop, but as far as I'm aware, there are algos that hunt stops and when I have a large position with six digits, I feel like I'm making myself a target to be hunted out? Maybe I'm just too egocentric right? I don't know, but I'll figure out what works best for me and will help me be consistently lose less and make more.
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