Stop loss reflex action

...continued from yesterday...

Here’s an analogy for thinking about using stop loss orders.

Drop by your local judo or aikido school. You’ll notice that one of the first exercises in every class is practicing proper falling. In judo and aikido, you fall down a lot due to getting thrown on the ground frequently by your opponent in the fight. That’s like in trading where your trade goes the wrong way often. Therefore, in judo and aikido, you have to practice proper falling so that doing them becomes a reflex reaction to getting thrown on the ground. Likewise, in trading, you have to practice stop loss order entry so that doing them becomes a reflex reaction to a losing trade.

...continued tomorrow...

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