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Hi Wayne,

You have raised an interesting point.

If we are looking at it from a psychological view point then we could consider it as a form of positive reinforcement or building trader confidence.

If we are fortunate enough to land a major windfall, then shouldn't we take advantage of it?

Why we are trading? Is it to create wealth, generate an income, both or more fundamentally make a profit?

If we are concerned with the bottom line, isn't realistic/pragmatic profit maximisation an aim?

To achieve any of these we can look at in terms of maximising profit. In this regard, why do we need to take an approach that fundamentally relies on the market proving us wrong?

We can use more than one strategy (exit) that enables us to protect ourselves from untoward or a sudden reversal in market direction and puts us in a position to potentially maximise the profit.

If we consider why we are using a stop loss from a risk management perspective, isn't it to reduce the consequence or impact of the market going against us. Effectively managing the downside risk.

Cheers.

<blockquote data-quote="lesm" data-source="post: 38440" data-attributes="member: 2798">Hi Wayne,You have raised an interesting point.If we are looking at it from a psychological view point then we could consider it as a form of positive reinforcement or building trader confidence. If we are fortunate enough to land a major windfall, then shouldn&#039;t we take advantage of it?Why we are trading? Is it to create wealth, generate an income, both or more fundamentally make a profit?If we are concerned with the bottom line, isn&#039;t realistic/pragmatic profit maximisation an aim?To achieve any of these we can look at in terms of maximising profit. In this regard, why do we need to take an approach that fundamentally relies on the market proving us wrong?We can use more than one strategy (exit) that enables us to protect ourselves from untoward or a sudden reversal in market direction and puts us in a position to potentially maximise the profit.If we consider why we are using a stop loss from a risk management perspective, isn&#039;t it to reduce the consequence or impact of the market going against us. Effectively managing the downside risk.Cheers.</blockquote>

[QUOTE="lesm, post: 38440, member: 2798"] Hi Wayne, You have raised an interesting point. If we are looking at it from a psychological view point then we could consider it as a form of positive reinforcement or building trader confidence. If we are fortunate enough to land a major windfall, then shouldn't we take advantage of it? Why we are trading? Is it to create wealth, generate an income, both or more fundamentally make a profit? If we are concerned with the bottom line, isn't realistic/pragmatic profit maximisation an aim? To achieve any of these we can look at in terms of maximising profit. In this regard, why do we need to take an approach that fundamentally relies on the market proving us wrong? We can use more than one strategy (exit) that enables us to protect ourselves from untoward or a sudden reversal in market direction and puts us in a position to potentially maximise the profit. If we consider why we are using a stop loss from a risk management perspective, isn't it to reduce the consequence or impact of the market going against us. Effectively managing the downside risk. Cheers. [/QUOTE]

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