You got to ask yourself - why is it that many of the traders that made north of $5M have a win rate about 25%-50%. Its obviously from not letting their losers run wild.
I thought you were okay with it as long as it wasn’t simultaneously edit: ignore. He was posting simultaneously
I used to know a very experienced and successful Trader who would use a very tight Stop. His reasoning was if his reason for entering was wrong, he shouldn't be in the Trade in the first place ie if his TA was right, the Trade should continue Up, no if buts or maybes.
Newb,unless you are a deep value trader,which you are not,one should ask if being in a 40% drawdown based on Elliot Wave Voodoo and knucklehead "option repair" with no upside is the best use of your very limited capital.. You are the classic trader turned investor when dead wrong
I would think the danger in that would be getting chopped to death by a thousand tiny cuts. Especially in an unfavorable market. I prefer to give a trade a chance to work and room to breathe.
I know a couple of traders with sub 25 percent hit rates who do the very same thing,and are very successful
Only strategy I am aware of which doesn't use stops are those where you allocate a tiny fraction of your capital in a market timing trade (i.e., you buy all bank stocks during the financial crisis, some blow up like Bear Stearns, but others recover). But since you are only allocating a tiny fraction of your capital on each individual bank anyways, if it goes to zero, it is pretty much the same as swing trading with normal size and having your 10% stop loss hit.
Trading is very much about having beliefs and putting a bet on those beliefs. You should only have a belief that you have a functional system which includes stoploss and that you will use the stoploss. No point buying unless you know how to sell, control your entries and exits. Buying is easy. Selling is difficult because often it entails a loss.