Do you get attached to your positions?
Positions acquire personalities: the one you believe in, the one that owes you, the one you're proud of. The attachment changes decisions — the beloved position gets extra chances, the hated one gets cut early.
What's your attachment pattern?
- which positions you get attached to
- how the attachment distorts your management
- how you keep trades impersonal
The stop-loss guide is the mechanical cure for attachment.
Background: Where to place a stop-loss: structure, volatility and time stops
A stop-loss belongs where your trade idea is proven wrong, not at a round number of pips. Here are the main methods and the mistakes that trigger stops early.
How far away should a stop-loss be?
Far enough that normal price movement doesn't reach it, at the point where the reason for the trade would be proven wrong. The position size should then be set so that distance costs a fixed share of the account.
Why was my stop-loss hit when the chart didn't reach it?
Charts usually show the bid price, but sell positions are closed at the ask. When the spread widens, the ask can reach a sell stop while the bid line on the chart stays below it.
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