Using Stop Losses

Using stop-loss orders actually creates more losing trades with risk-defined strategies.
Using Stop Losses
Kirk Du Plessis
Apr 19, 2021

I hate "stop-loss" orders - and you will too. Once and for all we'll completely put to rest our case as to why using stop-losses actually creates more losing trades with risk defined strategies. And it's not something that you can argue because it's based purely on the math and probabilities. But when it comes to trading undefined or naked option strategies there is one type of stop-loss order that "might" possibly help reduce your risk slightly over long periods of time. Even if you don't use this one particular stop-loss order you'll still be fine and have a very low likelihood of blowing up your account and losing all your money as long as you keep your position sizes small.

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Delta Hedging
Delta hedging is a neutral trading strategy used to generate income while staying nondirectional.

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Using Stop Losses

Using stop-loss orders actually creates more losing trades with risk-defined strategies.
Using Stop Losses
Kirk Du Plessis
Apr 19, 2021

I hate "stop-loss" orders - and you will too. Once and for all we'll completely put to rest our case as to why using stop-losses actually creates more losing trades with risk defined strategies. And it's not something that you can argue because it's based purely on the math and probabilities. But when it comes to trading undefined or naked option strategies there is one type of stop-loss order that "might" possibly help reduce your risk slightly over long periods of time. Even if you don't use this one particular stop-loss order you'll still be fine and have a very low likelihood of blowing up your account and losing all your money as long as you keep your position sizes small.

No tags found.
Next lesson
Delta Hedging
Delta hedging is a neutral trading strategy used to generate income while staying nondirectional.