The Folly of Stop Loss
Many believe with a Stop Loss in place the risk control job is taken care. But that’s not your only job. Your job is to minimize loss too and not adopt a costly loss aversion method of Stop Loss. Its Foolish to Leave it to the Stop Loss for Loss Aversion. And that’s The Folly of Stop Loss.
Of course the trading platform demands and must therefore have a Safe Stop Loss for the Trading Platform which facilitates better scope for profit cover and at times even a loss cover order.
Of course Stop Loss is statutory in the event of any flash crash or a calamity of some kind during the day.
More Sensible and better would be to have a Exit Startegy in place, to make sensible logical Exits before the trade is stopped out.
By itself Stop Loss is not an Exit strategy. Your process must have a defined and definite way to Exit.
Later, would suggest how Candlestick Analysis, Indicator, Wave Patterns can help you device your Exit Strategy instead of the Stop Loss.