Concerning stops. I do not trade discretionary any more, instead its all 100% automated. However, from years of developing systems, there are very few systems which perform better when stops are added. Not just in the P/L column, but even max draw down, sharp, profit factor, etc. They all generally deteriorate when stops are added to the equation.
I am not advocating not to close out a losing position. Just a stop doesn't generally help. I have found getting out when you have a valid signal or reason to is more effective. I think if college can stick to his instincts and is willing to get out of a position if "something"is telling him he needs to, then he doesn't need a hard stop.
I do use a hard stop in my automated systems, generally a worse case stop where I am trying to preserve cash as I know my reason for being in must have been invalidated. It didn't help any noticeable performance metrics,but its there only for my sanity. Since this thing runs 24 hours a day,I am not there to watch what its doing. Therefore, gives me some level of comfort to know I can not do worse than x.
College's insane leverage on the other hand likely can blow him out. If he scaled back his leverage some,would greatly increase his chances of surviving..
my 2 cents
