The best stop loss is not being anywhere near the whipsaw move that turns your gainz into a very angry ending! It's OK to take modest profits, over and over again. As long as you avoid danger and never get into a position where the overnight move can wipe you out. If you become obsessed with protecting your money, more will start to show up....
There is a hidden enemy in some of us, in our subconscious minds, goading us into giving our money away for no good reason. Some of us get married, some buy hot cars or planes, some give to questionable charities or join cults that take their ten percent, and some of us use fundamental analysis! The only thing you can control is your path of escape. It is the first and last thing between you, temptation and destruction. Know your worst case plan and do nothing, absolutely nothing until you can do it with financial safety.
1) yes, many traders bleed to death with too tight of stoplosses. 2) averaging down or scaling in to be PC Lol is a viable strategy for a scalper. At least it is for myself. But it should only be done when context is right. In a bull trend never average down short i.e. as to a losing short in a bull trend. However, in that scenario I will average down long. Conversely never average down long in a bear trend. That is, never add to a losing long position in a bear trend. However, I will average down short in a bear trend. That is, I will add to a losing short position in a bear trend. In an established trading range (20 or more bars sideways movement) I will add to a losing short position in the top 1/3 to top 1/4 of the TR. At the bottom of the TR I will scale in long adding to a losing long position. Why? 80% of BO attempts top or bottom of a TR fail. Odds favor a bounce for a scalp in both scenarios after taking a position. Traders get in trouble averaging down (adding to a losing position) because they don’t trade price action. They don’t understand momentum. They don’t understand the cycles a market goes through. They don’t understand how the market “probes” looking for more traders and more transactions. Looking for taking profits. Looking for when bulls will be taking profits and bears exiting with losses and how that created more momentum. For a scalper! Looking how and when bears take profits and losing longs exit creating momentum for bears. That is what pullbacks, and pauses, in PA is all about and why they show up on a chart. 3) Doubling and tripling up. Eventually a BO will succeed in a TR or a reversal in a trend. And if I have a position on and it is losing I have to dump it immediately double or triple up MY PREVIOUS position size and reverse direction, to be in sync with the successful BO. In a jiffy I have recovered my loss and printing profit. Many traders cannot make themselves do that. They get married to their position. They just keep averaging down and averaging down hoping…pleading…yelling….. But the market hears nary a word…nary a scream… To average down successfully one has to hold their position lightly and be ready ..johnny on the spot…to file a very quick and sudden divorce and before the ink dries get married again to the correct bride. If you catch my drift. I don’t advocate divorce except in trading..LOL. Today is my 46 year anniversary. Went out last night and had a good ribeye with the wife at Big Mike's Steakhouse. Fried shrimp from gulf …no imported stuff. No Ipad with me. No phone. Just the wife and myself. She loves that. A restaurant full of people. Most very happy even though the wait to get seated for some, was 1 to 2 hours.
Thanks! Life is short even if we live to be 100. We have to learn to enjoy the ride even in times of adversity. Our only daughter died at age 34 ..cancer. It was a big blow to us. But she would want us to carry on living life. Which we do even when we struggle, at times. When trading we face adversity too. How do we respond? In the last few weeks and months friends dying. We just never know. It is nice to have been married 46 years today to a great woman. Kind, thoughtful, considerate but still driven. She likes to get things done. Just an all around wonderful wife. I thank God for such a good woman. I have seen some I don’t think I could survive and thrive, living with them.
I spend time on ET to escape the reality of having to face a family health issue. I truly understand your pain with your daughter's passing. Just curious, why Honduras?