samedi 17 décembre 2016

Is stop loss hunting avoidance worth it?

Hi,

I've read some articles that say that one of the ways to avoid having your stops taken out by stop hunters is to widen your stops, thereby keeping them away from where hunters would expect the large pool of stop losses to be. For example, on a reversal trade, since hunters expect the pool of stops to be within, say, 10 pips of support or resistance, set your stop 15 pips away.

The issue: On the one hand, by widening your stop, it might be missed by the hunters more often than otherwise and you'll stay in more trades instead of losing your stop loss cash value each time. On the other, each time you widen your stop you're reducing your pip value; so if you win the trade, you'll end up with less profit.

Question: Which would be better in the long run, to place stops in the expected place and get stopped out by hunters more often while earning more on the trades you win, or to widen your stops, thereby keeping you in more trades, but earning less on each of those trades?

Thank you,
Norm


Is stop loss hunting avoidance worth it?

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