Forex Academy Quick Links:
Language:
English

Stop Losses are for Sissies…

Stop Losses are for Sissies…
Friday, April 20th, 2007 @ 11:26 am by Mihai Marinescu

OK, here we are attacking another classic traders’ myth which on Forex – because of the market’s high volatility – becomes a matter of a trader’s life and death.
We must have heard this dilemma a thousand times: should we, or should we not use stops when trading? Some say stops are for sissies… Others say trading without a stop is suicide… Arguments are on both sides, and in our next posts we will try to unveil some of the reasons why we believe the “sissies” are more sensible in their approach than the “neckbreakers”.
If we place stops, they will be there to protect us from large drawdowns… But then again, if we don’t place any stop there will be nothing to be hit, so money will just flow in and out of the trading account freely… Will that work in our favor, or against us? Can that make us rich overnight without any effort, or will that simple trade that we took and finally went wrong eat up our entire trading account because we failed to place a stop?
These are all questions we will try to find an answer to in what follows.
(to be continued…)

3 Responses to “Stop Losses are for Sissies…”

  1. Paul says:

    If using stops makes you a sissie then I have to admit to being one when it comes to Trading…

  2. Nader Moustafa says:

    well,

    its not for sissies, I used to trade without stops for a while,and it IS suicide,
    very simple, a trade I opened EUR/USD short @ 1.3085 which was the top of a 4 week range trading period and pretty much logical,now we’re 1.36++.

    I’d say a sissy is he who would have an open position with -500 and counting.

    Best regards

  3. Candie says:

    Superbly ilnnlimatiug data here, thanks!

Leave a Reply

Submit Your Comment

Our Global Forex Community

Follow us on Twitter! Join us on Facebook! Watch us on YouTube! Stumble Us!

Advertising

Next Free Forex Webinar

Free Market Commentaries

Advertising

Blog Archive

Forex Links

Educational Partners

The Geek Knows
AgriMoney.com
Traders' Magazine

Finance Blogs Blogarama - The Blog Directory