Hard Stops vs Mental Stops

If you have a large enough balance vs the amount that you are willing to risk per trade, mental and no stops are much better and will make you more money.

For example, lets assume I went long EUR/JPY, but a small position based on a trade setup.

Now assume I did it during the afternoon while the markets are not moving much with a planned time based stop rather than a hard or mental stop to get out during the European session or to get out the next day when I wake up.

This can work out fine rather than getting stopped out on a spike for a hard stop or getting scared out of a trade due to a mental stop.

Now the reason this can work out is the following, based on both backward and forward testing you either have a higher win% then loss% or your winners end up averaging more than your losers.
 
Now if your trade is shorter time frame say 5 min to 1 hour, I would use hard stops if you have mental problems watching your trade tick by tick, and just do something else like post on ET, or if you don't have these problems, use mental stops based on how the trade is going, for example, you went long, you determine in advance to use a standard stop or base it on how price is reacting after you got in the trade.
 
I haven't seen it mentioned, but one of the issues with hard stops is bad data triggering your stop when the market really didn't trigger it. If you aren't there to immediately correct it, it can ruin an otherwise good trade.
 
Quote from jiminsd:

Plus and minus of each. I am weighing the benifits of moving to mental stops. What is your take?
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I will use a hard stop if my position moves to profit, and set the stop to at least take it out at even if it reverses.

From that point on, its all touch and feel.
 
Quote from jiminsd:

Plus and minus of each. I am weighing the benifits of moving to mental stops. What is your take?
More...


OP

With all due respect to you… and my colleagues who’ve responded


You are delusional if you think for one second mental stops – and hard stops – are not the same

Start screwing with stops - you will get your ass handed to you – in spades….

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Commissions are a damn sight cheaper than flexible stops will ever be…..

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Using a trailing stop is fine – once in a profitable trade and it’s moving in you’re favor – if you are so inclined

But that is the ONLY type of stop that should get moved – ever…

And for the record - I primarly use mental stops


RN
 
Depend from the market and timeframe:

1. liquid market with hours our above time frame I use hard stop to protect my self from waiting too mutch to exit.

2. Scalping (less than 15 min time frame) I keep contol on hand with no hard stop to exit when I feel to whant. Continuous market monitoring necessary.

3. Not so liquid market the hard stop can be deadly, because insiders, floor traders hunting for your stop. I several times experienced to stopped out by single trades against me and turned the market to my original direction. NOT USE HARd STOP ON ILLIQUID MARKET!!
 
Quote from Redneck:

You are delusional if you think for one second mental stops – and hard stops – are not the same

And for the record - I primarly use mental stops
RN
More...

Maybe we need a definition.

Hard Stop: A stop order placed with your broker.

Mental stop: A stop order you are afraid to place with your broker because it might get hit.

I must admit that I use a combination. I have a stop number in my head and written down. Depending on the time frame I'm trading, when the price bar closes below that number I place an order with the broker below that bar.

The reasoning is to prevent myself from being shaken out by a spike down yet keep my loss reasonable.

Kind of a hard mental stop: :confused:
 
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