I think setting it very high (if you have a system with a proven edge from doing that, and I donât doubt that there are such methods and that they can be profitable, though theyâre not my own style of trading) is far superior to not setting one at all.
Anyone, anywhere, can suddenly have an internet outage, computer catastrophe, or even a power-cut, and it really costs nothing to enter automatically at least a âdisaster stopâ with every trade. I know not everyone agrees with this, but I honestly donât understand why, and will stick my neck out (as is my wont) and say that it seems something of a no-brainer, to me. You can gain from it; you canât lose from it. My case rests.
Itâs the âin generalâ part, there, that gives me palpitations. There are exceptions! There have been times when youâd wait a decade or more for that to happen. There have even been times when itâs never happened. Granted, it very often happens, but long-term, successful trading isnât about what âvery often happensâ: itâs about risk-management. Itâs not my approach, anyway.
10% sounds huge, to me (though I also take the point that with some inversely-correlated pairs perhaps in the mix of open trades, the net liability, in practice, could be less than the 10% nominally at risk).
It depends what you compare it with.
Opportunity-cost is âcostâ, too.
Investing 10k, winning and withdrawing 15k and then blowing the account is better than not trading at all (âit is better to have loved and lost, than âŚâ?!) but it compares terribly badly with investing 10k, winning and withdrawing 15k and trading on so that you can eventually win and withdraw another 15k, and eventually yet another, [I]which is what you need to be able to do to make a long-term living[/I], in this game.
Itâs yet another of those "It must be true: I read it at Babypips, and posted by a âverified analystâ " moments. ![](http://clicksmilies.com/s1106/sauer/angry-smiley-015.gif)
Where [B]do[/B] people get this purely fictional stuff from??? ![](http://clicksmilies.com/s1106/fragend/confused-smiley-013.gif)
(It concerns me that large numbers of aspiring traders will read it, here, and some of the completely inexperienced ones may actually [I][U]believe[/U][/I] it, so Iâm certainly not letting it pass unchallenged.)
2-3 pips?!?! Let us know when you find a broker with whom you can trade like that. No: on second thoughts, please donât. ![](http://clicksmilies.com/s1106/lachen/laughing-smiley-016.gif)