The importance of the stop

Advice I got from Millionaire
(Very grateful to millionaire for this advice)

{Calculate youraverage winning day.
Then one way is to try and set that as your loss limit on the downside.
So if you make on average $500 on your winnings days.
Set your daily loss limit at -$500
If your big losing days are rare, you could give your self a bit more leeway}.
 
Or, depending on how many contracts you trade (2 at minimum), set a stop at -12 for both contracts, so -6 a piece, and you can just scale out and then you would have the benefit of having a "free trade" after the first contract is sold.
 
The problem with using tight stops is that by jumping more frequently, when you finally go up in trend, the failures have already eaten much of the possible profit.
 
Completely depends on your trade style and volatility. In the current market, 10 seems fine of your targets are like 20-40pts. If your timing is great you could do 5.
Monitor every trade you do and see the average of how far the market moves against you and in your favour then you can fine tune it
 
A fixed stop loss??? It's difficult to apply while you are trading in different market conditions like going with a trend, counter-trend trading, sideways, momentum and etc... Also, be careful when you take an advice from others because you don't know if they are a scalper, day or a position trader. Most are likely ending up to become an investor with a hope that somehow market will reverse back to their entry point.

You know. I spent a lot of time to improve my entry point where I expect to make money as soon as I enter a trade. If not, I'll cut lost once ENTRY RULES ARE VIOLATED. It's as simple as that. The moment I enter my trade, I don't get excited to see how much I'm making. I rather focus on my entry rules to see if they reverse.
 
12 would be a worst case your counter trend taking a loss, how much are you aiming for profit, 4-6pts is typical on ES was more friday.


Big or small works out the same generally, a 2pt stop would be hit 6xs as often so balances out.
 
What is your basis for using a fixed 12 point stop? I’m not a firm believer in a fixed stop. When i was using time based charts where candles can widely vary in size depending on price action. I used ATR to determine my stops. I typically used 1.5-2 x ATR for my stop.
 
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