that tool is just like tradeguider... it shows after the fact.. but i found the claim of 90% with 2 point stop very interesting. Especially since I use to daytrade with fixed 2-point or 3-point stops as newbie.
Agree, it's conjecture. And daggone it anybody that thinks they can make money shorting the bottom of that big red bar should do it, this is America.
Failure has nothing to do with stop size. Trading unfounded untested methods cause the most losses. Frustration trades are another huge loss and inexperience of not taking a quick loss. It really comes down to one's backtesting as far as your protective stops. I normally use 6 tics, but as price gets deeper into trend - less. Breakout traders have to risk more usually, whereas retracement traders much less. Much just depends on your methods and duration of one's trades as well.
Risk tolerance and risk/reward is what determines an acceptable stop loss, not timing, not method, not back testing. Most traders lose due to over trading and ignorance. Usually ignorance of risk management and under capitalization (greed).
A 2 point stop in the middle of nowhere is no use. A 2 point stop which protects you from a critical PA level can be golden. So it is not the size of the stop, rather the trading strategy and where the stop is, which is relevant. Remember stop is there to protect your capital and you want to make sure you have good RR and overall positive expectancy for your system. Without these two, even a two tick stop will lead you nowhere.
kinda doesn't make sense...what about if you use a .50 point stop and are always getting stopped out and commissions are eating you up?...
I use a smaller stop than 2 pts. You can only do that if you have a disciplined entry strategy. Most traders can't make money with a 2 or 10 point stop. So, it's not the stop size ALONE that makes the difference.