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If the stop has to be wide, then your position has to be smaller. It's that simple. If you have a small account and the stop you would use implies too much risk in the trade for a single unit position, then you are better off not taking the trade and waiting for another opportunity.
Traders often get fixated on having close stops because they think that means lower risk. That's not true. Closer stops are more likely to get hit by normal market action (noise), which actually makes them more risky. |
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I agree! I like to put stops close enough to be valid from a money management standpoint, but intelligently placed under areas of "Price looks like it's reversing here" type of thinking.
