Stops are frustrating for beginner traders.

An overview of the appearance of stops  and how to react to them 15 / 02 / 22 William Hunter Visitors: 187 Rating: ★★★★★

As the Cheshire Cat from Alice in Wonderland said, “If you don’t know where you want to go, then it doesn’t matter which direction you go.”

Yes, you came to the stock market, but there is no clear understanding of what you want to get here and how to achieve it. The wording “I want to earn a lot” is not the goal, as it may seem. This is a blurry intent that will quickly fade when you face the harsh reality of the market.

The goal should be clear, precise and strong, so that despite any market storms, it remains in the focus of your attention.

Stops are frustrating for beginner traders. Like novice drivers, the red traffic light is frustrating. You just accelerated, and then red again. And again you have to stop. But we all understand that a red traffic light is a mandatory component of our road, right? It is extremely rare that our entire route can be driven without red traffic lights. Unless it's some kind of track (one medium-term trade). Do you understand the analogy?

Stop is an obligatory component of a trading system. It is impossible to actively trade in profit without getting stops.

How to work with stops and fit them into your trading?

Write a plan for the development of events. How many takes will you need to take if you have 1 stop? What if 10? What if 30? If you have the right risk/reward ratio, you will notice that the more stops you get, the fewer winning trades you need to take relative to the number of losing trades.

Never measure stops in money. Convert everything to percentages, and better to points. When you increase your deposit at some point, you will be sorry to lose 10 thousand in a deal, for example. Because of this, you will miss profitable trades. It is much easier to treat the stop when you just have 15 points, and not new shoes, phone, and so on.

Do some work on the bugs. Why do you have a stop? According to plan? Then everything is fine. Breach of discipline? Be sure to do work on the bugs, trade on the player for a day. We look at what would happen if you worked exclusively according to the plan. Such work on mistakes develops discipline.


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