I have a trader friend who says ...
"There are 3 ways to exit a losing trade. You can stop out, you can margin out, or you can chicken out." I think he's a margin out kind of guy and let's it ride a bit.
"There are 3 ways to exit a losing trade. You can stop out, you can margin out, or you can chicken out." I think he's a margin out kind of guy and let's it ride a bit.
Quoting moonchildDisliked
The first question is: What constitutes a losing trade? By my definition, the only losing trade is one which is going against a momentum change. Otherwise I believe in exercising patience and my margin, which sometimes gets quite a workout.
You can define a losing trade as one which is -10 pips or -100 or -200. It is all in the definition of the term "losing trade." It all really comes down to how much patience you have and how much drawdown you are willing to accept. Honestly, I have almost never ended up in a trade where it did not turn my way within 200 pips, although sometimes due to stop losses I was no longer im the trade due to my stop loss getting hit.
My back testing, basically looking at my lost trades, has showed me that my losses were directly the result of my having used stop losses. I would have had one losing trade if I had not used stop losses and it would have cost me 200 pips+, although I would have gotten out at that point because I would have realized by then that the trend had turned around. As it is, I lost FAR more than pips than that, the only difference being that instead of being in one large lump it was in a large number of small packets. I will not admit how many losing trades I had and at 20 tp 30 pips stop losses each, you can just guess how much I lost.Ignored