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Strategies & Market Trends : Trade What You See, Not What You Think
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To: TraderAlan who wrote (48)10/15/2000 8:16:30 PM
From: booters  Read Replies (2) of 867
 
But then the trade also shifts into an active management phase

I think that we are agreeing here, a stop and an exit point in my mind are not the same thing but a fluid exit point can be a valid strategy instead of a stop. It must be, let's say, a fixed or predetermined rule for exiting to be valid but still I think it works.

This active management maybe confusing to some new people so I am cautious but I think trading methods must be built with the correct pieces and a fixed or trailing stop is not always the correct piece. Example would be a simple moving average cross over. I hear many people talk about trading some form of this and getting stopped out. I do not think a fixed stop fits with this type trading method. I have done piles of testing on this type of trading and it always fails if a stop is used.

So I guess my point is this, a further understanding of stops or exit strategies is important and just an absolute rule, A STOP MUST BE PLACED, can actually kill a method and a trader can be loosing money while thinking he is doing everything correctly.

Again I will say that for a new trader this is probably the best thing to do but make sure the rest of the method is in tune with it.

Now that I have brought all this up I fear I have not explained myself well enough not to confuse many. Maybe some one else can chime in with a better explaination.

Help.

boots
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