I don't agree. When you backtest your system you use a stop. The results of the backtest are based on that stop. So it can happen that a trade almost goes to your stop before returning and giving you a decent or even huge profit. In your backtest you have this profit. If you would get out before the stop is reached, you miss that (maybe big) profit. Always follow the rules of your system if not it makes no sense to do backtesting. Same for taking profits too early.
One thing that has stuck with me through the years is a quote by Ed Seykota in his Market Wizards interview. " Folllow the rules without question. Know when to break the rules." The OP asked what to do when something unexpected happened.
Just follow the rules. There should be rules for unexpected situations too. If I don't know how to manage an unexpected situation I just get out. That's my rule. All depends of course of the specifics of your system. I tested by trying to optimize myself the trades by breaking the rules. The result was a loss of profits and a higher drawdowns. Test was on about 1,000 trades. My system was beating my improvisation. The problem is that you should know when to break the rules. How do you know when to break the rules? You need rules for that. Which becomes in that way part of the system. So in that case you still don't break the rules. You added rules. There is a contradiction in what Seykota tells:follow the rules without question. Then he says: Know when to break the rules. So not follow the rules without question? Follow the rules but also break the rules.
So you would get out before you hit your stop. I think that's what I suggested. Like you said there is probably a rule on when to break the rules. Trading is simple, not easy!
No. I tried to write down why, but it becomes too complicated to explain, so I give up. If I am in a trade I quite with a profit or get stopped out. No other options possible.
%% LOL\ i checked the timing of his post.QQQ + QLD had a much more than average roller coaster week=JAN 16-22-2021 week. DONT know exactly what he he did so i'll guess. BUY monday tends to be a good short or inverse profit day. BUT that usual down monday/instead gapped up more than normal; so a normal short QLD or sqqq buy\ would lose more than average. A normal time stop on that trade would tend to lose more that day. I seldom front run my stops, even though i watch PSAR.A couple of exceptions may be wise; i was in FAS + within 24 hours FED made an unexpected announcement, could still be OK, but since it was the underperformer for me\ good to kick it out early, not fast kick/exit out.,
Yes, Trading is simple but not easy. Traders with "trading is easy" mindset have get rich quick mentality and hence, are unable to stay in the game for a longer run. Instead, understanding that trading is not an easy task will encourage you to be more willing to learn, be more careful and prepare better when trading.