[Question] When you cut losses, you become loss-cut poverty, so I can't think cutting losses is important [Answer]
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【FX Method】Profitable Trend Following and Diligent Counter-Trend
【Question】
The idea of stop-loss sounds good, but
If you make a mistake, isn’t that the end of the game?
I feel like there are absolutely more people who become poor due to stop-loss
so stop-loss doesn’t seem that important
【Answer】
Stop-loss does have a big part in it
There are people who keep stopping out without understanding what they’re doing and end up “stop-loss poor” with more losses
However, stop-loss is only a stop-loss based on a trading strategy
and “not something to be used on its own”
The concept of stop-loss being stop-loss poor occurs when you use it on its own
If you use stop-loss based on a trading strategy, it isn’t stop-loss in itself
It’s like an honorable medal, a mental discipline that allows you to execute stop-loss in that way
So, because you’re operating under a trading strategy, if you continue trading
the cumulative result of take-profit and stop-loss becomes a net positive
That is what the concept of “stop-loss” really is
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