Two popular adages of trading include:
-Cut your losers
-Let your winners run
There is obviously a balance between each which must be achieved, but focusing just on 'cut your losers' with regard of how that affects profit potential, how does one go about ensuring that losses are as small as possible?
I'm torn between two methods:
1- Put your stop in and leave it
2- Move your stop to breakeven
Obviously there is an 3rd option which is to trail your stop, but I have never been a fan of that.
Do any data wizards have an answer to which is the best at controlling losses?
Remember: lets not look at which is the most profitable, but rather which one controls loss the best.
-Cut your losers
-Let your winners run
There is obviously a balance between each which must be achieved, but focusing just on 'cut your losers' with regard of how that affects profit potential, how does one go about ensuring that losses are as small as possible?
I'm torn between two methods:
1- Put your stop in and leave it
2- Move your stop to breakeven
Obviously there is an 3rd option which is to trail your stop, but I have never been a fan of that.
Do any data wizards have an answer to which is the best at controlling losses?
Remember: lets not look at which is the most profitable, but rather which one controls loss the best.