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Re: Money Management Stops



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Many times traders believe that stops cost them money because they get 
stopped out and then the market makes a big move and they miss it.

The stop is not to blame in these situations.  The mistake is in not getting 
back in.  Missing big moves is not the fault of the stop -  it is the fault 
of the entry (or lack thereof).

I have often advocated that an ideal trading system should have an entry 
method and a re-entry method for the trades that get stopped out.

We also need to remember that our biggest losing trade (and our biggest 
winning trade) have yet to be seen.  This fact makes many popular money 
management strategies overly aggressive.  Its best to employ a conservative 
strategy and make sure you have the staying power that allows you to apply 
your trading advantage over a long period of time.

Chuck