(Last Updated On: March 9, 2020)

– In any case, most of the time what I realize is that premature stop loss, right? Shouldn’t be based on, you think that it’s going to fail. If you think that it’s going to fail after you get into a trade, let it fail based on the stop loss. You get my point?

– Usually from a best practices angle, the rationale or the reasons of taking a premature stop loss before it touches your predetermined stop loss level is due to a time stop. Have you heard of this term called time stop before?

– Time stop, yeah, I heard about it, yes.

– Yeah, so usually time stop is from the angle where after I get into a trade, I expect it to start working within a specific time. If it is not working within a specific time-

– But getting this, I have a difficulty because, when it is not moving, I guess when they are not moving with the, with the range, range bonded time, that time, I tend to just hold still. Most of the times there’s nothing like a, I tend to keep till the stop loss is hitting.

– Yes. So what happens is that you get into a trade, it goes nowhere. It doesn’t go to your stop loss, it doesn’t go to your profit target. So you just hold on to it because you are worried that if you get out, it will start running in your direction. That’s the fear you have, right?

– Yeah.

– It could also, it end up breaking down in the opposite of the direction. So it’s still a 50/50 chance. Okay?

– Yeah.

– So what I’m trying to say is, I’m not suggesting that you should use a time stop. I’m just saying that from a form of best practices. Okay?

– If you’re going to get out prematurely before the price touch your profit target or before the price touch your stop loss, the best practices, the rationale, the main rationale or why people get out before it touched the predetermined stop loss and profit taking level is because of time stop. So if you feel that time stop is not something that you want to use, then there is actually no other reasons why you should get out prematurely.

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