Do you used pending order in your trading ? I read from somewhere that "Never use stop loss orders for active trading because investors that watch their screens all day and are involved in day trading a stop loss order serves little purpose and never use stop loss orders for large positions."
Setting pending orders has an advantages
If the market spikes in your direction it will capture the order
Allows you to create a set and forget mentality
Allows you to analyse other charts once you have placed your order
A popular method is to place pending orders at double or triple tops.
In terms of being told never to set stop orders when you are actively trading, that is the worst advice I have ever heard of in my life!
Trading is all about risk management and a well placed stop order helps you to do that. The market can spike at any time and if you’re not watching or ready it will go past your predetermined risk limit and you will end up losing more than you bargained for.
It all comes down to one thing, Risk management. By placing orders you put in place some hard and fast rules plus allowing yourself to analyse other charts without fear of missing a move.
I have heard that there are banks and funds who will place big pending orders so that those who can see the order flow will assume that when price reaches point A or point B, a certain reaction will follow. Many times these are just games played by people or software in order to fool other people or other software. Eg, if I can see that there are many big sell orders when EURUSD climbs up to 1.2750, then I may be tempted to sell at 1.2745. The thing is that those who have placed the pending orders at 1.2750, may cancel them before they are filled and so price may shoot up without much resistance. All kinds of games are being played, but one thing is certain: Nobody gives a damn about whether small retail traders have stop losses in place or not. Those small retail traders who don't use stop losses, either have a huge drawdown tolerance (they don't care if they see an 1000 pip movement against them, it's an acceptable parameter of their system) or, more frequently, are simply fools.