Justine
Recruit
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Stop losses are hunted by brokers all the time.
A lot of times tight stop losses get hit during whippy price action when volume is thin.
You only need a stop loss if you are over-trading your account. For example if you are trading 1 mini-lot with 200:1 margin in $5000 account, 100 pip move against you, means nothing.
If you entered a position and it turned against you, you could hedge by entering a position in another pair that tends to move the other way. (EUR/USD and USD/CHF for example).
No currency pair moves up or down forever. There is always a retracement. If you trade really small, hedge (see the point above), when you see the signs of the retracement you could add (again small) to your position so that you could get back to even or profit sooner.
In my opinion, stops are only useful in order to protect profits.
Stop losses should be mental and used with discretion when it is obvious that the major trend has really turned the other way and there is no point to wait for a retracement.
Anyway, the key to this strategy is to trade really really small. 1% or less for every position. It is very important to have enough money to enter small positions in different pairs that might move the other way till a reversal comes.
Now, this opinion is mine and mine only. I know a lot of people would say that this is crazy, but so far this attitude towards stop-losses has worked well for me.
I had 30 profitable trades and 0 losses since I have adopted this strategy 2 weeks ago.
Any discussion welcome.
A lot of times tight stop losses get hit during whippy price action when volume is thin.
You only need a stop loss if you are over-trading your account. For example if you are trading 1 mini-lot with 200:1 margin in $5000 account, 100 pip move against you, means nothing.
If you entered a position and it turned against you, you could hedge by entering a position in another pair that tends to move the other way. (EUR/USD and USD/CHF for example).
No currency pair moves up or down forever. There is always a retracement. If you trade really small, hedge (see the point above), when you see the signs of the retracement you could add (again small) to your position so that you could get back to even or profit sooner.
In my opinion, stops are only useful in order to protect profits.
Stop losses should be mental and used with discretion when it is obvious that the major trend has really turned the other way and there is no point to wait for a retracement.
Anyway, the key to this strategy is to trade really really small. 1% or less for every position. It is very important to have enough money to enter small positions in different pairs that might move the other way till a reversal comes.
Now, this opinion is mine and mine only. I know a lot of people would say that this is crazy, but so far this attitude towards stop-losses has worked well for me.
I had 30 profitable trades and 0 losses since I have adopted this strategy 2 weeks ago.
Any discussion welcome.