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svahid
So sticking to a strategy and profit plan is vital, I'll try and remember that when I go live.
Stop losses though are just something I cannot understand, or see the point of. They just seem like a guaranteed loss-maker to me. Ok I understand they are there to limit losses but if one has the equity to support a negative position until it reverses (or at least comes closer to break-even ie less of a loss) then surely it's better to go with it. An example was the other morning, I went short, watched the market go the other way to the tune of 125 pips (gulp!), then watched it go back to where I'd sold, then move in my favour and go on to show a healthy profit.
If I had to set a stop-loss at 10% of my equity that would mean around 30 pips. At 30 pips I would too frequently get stopped out. To make up that loss I would have to do another trade, which I would more than likely be stopped out of....kind of a vicious circle.
If I set the stop-loss to a level where I wouldn't be stopped out then it would be too much of a loss to suffer. Ok, I could reduce the margin and have less leverage, but then I would have to wait for larger movements to realise a reasonable profit, another vicious circle.
Everyone says set a stop-loss, it's gotta be right, but I still can't see why, or at what level to set them.
Cheers
Pete
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