How do you stay humble in trading?
The market humbles everyone eventually; the question is whether you volunteer for the lesson or get drafted. Practises of humility — posting mistakes, reviewing losses, assuming you're wrong — are the volunteer version.
What keeps you humble?
- the practise that works for you
- the humbling you got drafted into
- how humility improved your results
The stop-loss guide is humility in trade form.
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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