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Manning Stoller wrote:
> Dear Stan,
>
> I'm sure you mean well when you advise to "limit yourself to a specific dollar
> risk on every trade" but I think that may be one of the worst things to do.
Yes and no. There are two sides to this of course - determining the proper exit
point with a trade, and determining the maximum one wishes to lose. I agree that
arbitrary stops and targets are ill advised, due to their lack of real connection
with the play, but one *still* may wish to set a maximum figure that he or she is
prepared to lose on a single trade. One can then tailor one's trading style and
selections to suit this, although always keeping in mind that this figure is a cap,
and should not be the determining factor for exactly when an exit should be taken.
This becomes a little less simple with dynamic exit points (i.e.. conditions that
are dependant on ongoing performance). Still, one can easily develop a good idea
of what can be expected from the particular method that is used.
Regards,
A.J.
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