Advanced Manual Stop Loss Strategy

Do you have experiences where you got stopped out in a strings of trades? I do. Even they may be small losses, they do ultimately add up. Theoretically, if you get stopped out because you followed your trade plan, you are being disciplined. It's better than moving stop loss and stay in a losing trade, right? Well, that's true. The problem is from my experiences all those stopped out trades could be avoided or at least be alleviated. How is that possible you may ask. Well, we are going to take advantage of the fact that price movement tends to fluctuate a lot except in the case of extreme momentum move to one side.

Objective
Cut down losses to the minimum

Requisites
- Active monitoring and management of trade positions
- Discipline to exit trades manually

How this system work?

1. For example, you have decided that your stop loss is going to be 20 pips. This shall be your mental stop loss (at -ve 20 pips)

2. However in the actual trade, you will put a fairly larger stop loss, say -ve 40 pips.

3. Monitor the trade when it gets triggered. The moment the trade goes against you, and hit the mental threshold of -ve 20 pips or more, you may consider treating this as a bad trade. Watch and wait for the price to pullback a bit in your trade's favor. Chances are you will get to -ve 10 pips or less. Sometimes, you can even get to breakeven or even get a small profit. Usually, I will exit a bad trade with a few pip's small loss, if I feel that the momentum against my desired trade direction is very strong.

4. The worst case scenario is that you get hit with the bigger stop loss. From my experiences it doesn't happen that often. The amount of money I saved from my active manual stop loss management is worth the risk.

5. If you follow this system, your risk-reward ratio will improve drastically.

Thanks to share this Manual Stop Loss Strategy with us. I will use it and hope it will work well for me as well.

Simpler terms:
You put in a hard (or physical?) emergency stop loss
and, trailing it to a smaller loss, BE (break-even) or a small TP, a soft or mental regular trailing stop loss.

Yeah, I recently found breaking up a trade easier, as I tend to find in my chart drawing methods too many reasons to enter or exit and too few ways to rank and select from them.
Right now, I add breaking up a trade's exit into even amounts of microlots, and then choose whether or not to bunch a number of these smaller potential trade exits together,
to select a proportion that helps rank the exit reasons I find after the initial entry reason for the TP and reason for the SL.

As I get better at ranking and selecting from possible reasons to trade, I hope to be able to select from various approaches --

1. mental or physical
2. TP and/or SL
3. per-lot W:L count or chart, with bars as a ratio of physical TP to SL during that lot held
4. an entire entry or exit's number of lots broken up into
   1. even or other artificial (examples: chandelier, Pascal's Triangle (seems fractal,logarithmic)) proportion
   2. one of those and then reproportion according to reasons
   3. purely reason-proportioned sizes

5. an entire entry or exit made bigger or smaller according to confidence in the original reason
6. some reasons considered an emergency and others a regular type
7. reduce or increase the number of initial trades

to break up a trade, according to how much confidence I can demonstrate in each reason.