Yes you can limit the loss by 1-2% per trade using Stoploss…but overtime slowly but surely the account goes down to $0
Stoploss is the account killer
The problem is not simply setting stop-losses, it is losses, which is a much more complicated issue.
But you should go ahead and expand on what would be the better approach that you have found.
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Yes to a degree a tight stop is an account killer but you need to be sensible by reading the chart and applying the stop loss in a safe area as a safety net to protect the account , not doing so will kill the account
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You need a stop loss no matter what unless your willing to lose everything. I agree with you that setting tight stops will kill you overtime. So that leaves you with setting stops further out and taking smaller positions.
It all comes down to the expectancy and average R multiple of your system. Tight stop losses are not a problem, even it it stops you out 3 out of 4 times, as long as your R multiple is at least 4R, which equals an expectancy of 0,25. This is a profitable system. It is all about finding the right balance that fits your trading style and gives a positive expectancy rate.
The problem is having tight stop losses, a low win rate and an average return of for example 2R, then you will drain your account to 0% very quick.
Stop losses are the only way which stops your account from blowing out
Stop loss is a killer if you do not use it properly. You should risk reward ratio of your strategy. In ranging market it seems price comes back again. But if the market trend for long and if you against the trend you will eventually get the margin call.
By setting stop loss, you cannot avoid losses. You just set a limit for your losses. Losses will still be there.
I would rather trade with a stoploss than without one. When choosing between two evils, pick the lesser one.
I am glad that all the forex brokers offer the benefit of customer support to their clients. Whenever I am stuck somewhere, I simply get in touch with the customer support and get the required help immediately.
I would differ here. For me SL cannot be an account killer, rather it has saved me against big losses so many times.