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>Recently I read William Gallacher's revised edition of "Winner Take All"
>(excellent book, BTW). He discusses at length an idea I have heard echoed
>by some other great traders over the years: the idea that, rather than
>stops being placed according to a 2% risk, that they really should be
>placed "correctly" for your system,
I don't know anybody who says stops should be placed such that 2% of
your equity is being risked. Rather, stops should be placed sensibly
according to your trading strategy, and it's your responsibility to
ensure that you have sufficient equity in your account to accomodate
that risk at a 2% level or less.
In other words, don't be under-capitalized. If you don't have enough
money to trade, then you shouldn't be trading.
-Alex
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