Have you ever wondered:

• Why the word "abbreviate" is so long?
• Why are wise men and wise guys opposites?
• Why is it called quicksand if it takes you down slowly?
• Where do forest rangers go to "get away from it all?"
• Why is it that when we transport something by car it's called a shipment, but when we transport something by ship it's called cargo?

I'm sure there are reasons for all of these, but on the surface they don't seem to make sense.

What about stop losses, do they make sense?

We often hear the trading rule of 'always use a stop loss', no matter what, use it everywhere, but…

Does it actually make sense to ALWAYS use a stop loss?

Or are there occasions when using a stop loss DOESNT make sense?

And if so, how do you handle that? How do you manage your risk?

In this week’s trading thought, we’re going to review a chat with Dr Ernie Chan about stop losses, and we discuss these exact points, so let head on over to Ernie and find out if it makes sense to ALWAYS use a stop loss.

 

Disclaimer: Trading in the financial markets involves a substantial risk of loss and is not suitable for everyone. All content produced by Better System Trader is for informational or educational purposes only and does not constitute trading or investment advice. Past performance is not necessarily indicative of future results.