Using Stops Effectively
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Sunil Mangwani leads a discussion on methods to effectively use stops to preserve trading capital. In this article, he outlines ways to use the pivot point formulas as stop placement zones when trading Forex markets.
A single loss is not only a loss of capital; it also puts a trader two-steps behind in the quest for profitability.
The reason for this is that the percent gain needed to recover from a loss increases geometrically with every loss.