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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
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