Don't use stocks as an example ... apply it to forex. This is how I see it ... think of it as a ratio. For a standard lot. A 10 pip stop loss=100 bucks A 50 pip stop loss=500 bucks
10 pip stop = %10 accurate = $10 000 profit
50 pip stop = $42 accurate = $50 000 profit
If your stop is 5 times "bigger" you are MORE ACCUARATE and you make 5 times the money.
The lesson in all this? The bigger the stop the better your chances of success UP TO A CERTAIN POINT! If you go over 5 times your usual stop your accuracy does not go up by much.
Now the question is: What are the dollar amounts he talking about right?
I have no clue LOL! He is just making the point of using larger stops (maybe 5 times your usual!), make for more successful trading.
IF YOU DON'T RISK THE PROPER AMOUNT ON EACH TRADE YOUR LOSSES WILL ACTUALLY INCREASE. (from being stopped out all the time)
FXINSIGHTS does not use stops and I am beginning to see why they are successful. Of course if your are goin long JPY crosses and the market takes a dump like last february you NEED TO put a stop ... but these dudes follow the market 24/7 so thay are good.
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