Chapter 15
Formulating Trading Decisions
I haven’t failed. I’ve just found 10,000 ways that won’t work.
—Jimmy Durante, aka “The Great Schnozzola”
The emphasis of this chapter is on the process of making your trading decisions. It starts with controversy by questioning the benefits of using protective stop orders.
Prevent Excessive Bloodletting
Amid the consensus among market strategists to take a defensive stance, simply questioning the absence of a protective stop order invites criticism. Before addressing this contentious topic, would you accept the premise that although protective stop orders can be effective, they frequently misfire?
The primary reason for supporting the use of a backstop is to offset your position before a minor loss turns ...
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