DislikedAnother related trivia : how do you make a risk free or limited risk entry without using SL or limit/stop hedged orders.if Graeme advocates against predefined entries, why do we have to redefine stop loss during entry at the high/low of candle or whatever. Why do so many threads and strategies advocate putting stop loss at levels for smart money to use us as scapegoats to their benefit in filling large orders as TRD described in his recent post? One has to QUESTION everything we read/hear when it comes to trading and back every theory with hard...Ignored
You are placing a trade when you ENTER and you are placing a trade when you EXIT. This means both ENTRIES and EXITS are discretionary. SL is an EXIT which means SL's are discretionary whether you do it manually or automatically.
Hence how you decide to EXIT whether it is taking a loss or taking profits (partial or whole) should be an individual thing. It shouldn't really be a concern why so many threads and strategies advocate putting SL at levels to get taken out by the big boys.
What should be a concern is how the individual trader himself decides to control his risk. Greg Wilson once talked about the subject nature of stops and he has his own personal reasons for not using fixed SL. One of his reasoning is that even if you set your SL to 20,30,50,70, 100+ pips, They all get hit eventually. Greg also chooses to trade this way so that he mentally becomes more picky with the higher probability setups. Peter Crown's on the other hand chooses to place the SL on the inner bar for a tighter stop instead of the mother bar for a wider stop. Peter is willing to sacrifice higher winrate for better R:R.
Hence there is no absolute right/wrong answer with how one cuts his losses. As long as you plan ahead how much your willing to lose, the only question left for the individual is how to handle he profits when your SL does not get hit. How you handle your profits ultimately defines what type of trader you are.