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Strategies & Market Trends : Systems, Strategies and Resources for Trading Futures -- Ignore unavailable to you. Want to Upgrade?

To: virtualsignal who wrote (41797)	12/6/2000 6:12:13 AM
From: Patrick Slevin	Read Replies (1) \| Respond to of 44573

Nemer gave you an answer but there is another problem with mental stops. Like you say, you kept moving it around. You should never loosen a stop. With mental stops there is a slight tendency to give it mental slippage. With a stop set at 70 with the market at 73, a drop to 70 takes you out on a real stop with or without slippage. With a mental stop and some pressure you may have an urge to "give it some room". So you give it some room, it hits a minor bottom at 68, tries to come up and for an instant you feel good that you did not get taken out. Then quite possibly it nosedives and you go in at market. I use mental stops sometimes when I am scalping, and I happen to have mental stops on some currency trades I'm in at the moment. Generally speaking though, it's risky to use mental stops unless you not only are watching it but also you have the willingness to take yourself out without exception. Trading large contracts is even harder with mental stops because of the time delay in transmission and reporting. If you are using that new software today try doing it with real stops sometimes, mental stops other times and see what the difference is.