Learn to Stop your Losses

newtrader10

Newbie
3 0
Have just finished an excellent (short) e-book called Stop Losses by Matt LeRouge that's only been out for a few days on Amazon, and I feel inspired to tell more traders about it....

Just the kind of thing we should all read from time to time for a reality check...

Seems it's written from the heart and makes a lot of sense by laying out a number of down to earth rules - - if any of you read it let me know what you think....I'm pretty sure it'll go down well..
 

resistance

Member
89 1
I have not read the book but I have an advice to reduce your losses. You should always use partial position close technique and move the stop loss to breakeven when your trade move in profit.
 
M

member275544

0 0
I have not read the book but I have an advice to reduce your losses. You should always use partial position close technique and move the stop loss to breakeven when your trade move in profit.

thats not good advice, you will likely be stopped out more times than not and then see price move in your favour..you need to give yourself room.
 

neil

Legendary member
5,167 747
I have not read the book but I have an advice to reduce your losses. You should always use partial position close technique and move the stop loss to breakeven when your trade move in profit.

Dangerous advice - you will get stopped out frequently as price moves about.Look at any price chart - price does not go up and down in straight lines - it needs room to "wiggle." (Zig Zags about before moving off from your entry point).
So how do you use your stop?- ah, there are many theories so take your pick by Googling and searching on T2W.

There is no right way to use stops - only a right way for YOU !
 

Babyblush

Active member
132 4
I have not read that book but if its really very much useful then sure it would be worth trying to read the ebook so that we can limit the losses which we face while trading.
 

Profitsniper007

Active member
107 2
I have not read the book but I have an advice to reduce your losses. You should always use partial position close technique and move the stop loss to breakeven when your trade move in profit.

I am not sure if this is necessarily bad advice in general, maybe you just never explained it fully.

If you meant, partially close the trade when you have hit one profit objective, eg 20 pips and then move stop onto breakeven, this could be OK.

If you mean just rapidly trail the stop once you have got into the green, then this is possibly dangerous since you are getting a pretty badly distorted risk/reward ratio.

Especially if you are saying that if you have a 20 pips stop, you cut half at 10 pips loss and then once you have trade 10 pips in profit you put SL into breakeven.

I would think that over time this would prob be more likely to result in losses overall, since you are booking losses where you may not book losses and getting taken out of trades where you may well have made profits.
 

DitterPD

Active member
177 6
Have just finished an excellent (short) e-book called Stop Losses by Matt LeRouge that's only been out for a few days on Amazon, and I feel inspired to tell more traders about it....

Just the kind of thing we should all read from time to time for a reality check...

Seems it's written from the heart and makes a lot of sense by laying out a number of down to earth rules - - if any of you read it let me know what you think....I'm pretty sure it'll go down well..

Can you maybe give us some short review, main points of the book?
 

cesar470

Junior member
15 1
Another important rule for today


Never risk more than 2% per trade. This is the most common - and yet also the most violated - rule in trading and goes a long way toward explaining why most traders lose money. Trading books are littered with stories of traders losing one, two, even five years' worth of profits in a single trade gone terribly wrong. This is the primary reason why the 2% stop-loss rule can never be violated. No matter how certain the trader may be about a particular outcome, the market, as the well known economist John Maynard Keynes, said, 'can stay irrational far longer that you can remain solvent.'
 
 
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