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Hi
Al says that in every trade I should risk the same amounf of money, so my stop determines my position size.
But in some videos Al says if the I use a wide stop, I will loose less often but when I loose, i will loose more. This I dont understand. What I always do, is that I reduce my position size so that if my stop gets hit, I will loose the same amount of money than I a used a tight stop. I would loose the same amount of money in both cases.
Or does Al mean that in tight stops, I have to risk less money because it will be hit more often?
Thanks
I think he's just saying that if you lose, you lose more on the same position size. Therefore if the risk is too much when using your typical position size then you have to reduce size. So you're doing what he's recommending you do!
Also, it's "lose" not "loose" 🙂
Thanks Garrett! 🙂
If you're a Forex trader it might make more sense in that you can almost always trade a % of your account based on your stop because in Forex you can get down to micro lots and if you use a broker like Oanda you can get down to small units.
In futures it's different in that you are limited by your account size when compared to Forex. You pretty much can't trade a $500 account for example even in the MES. IOW, you can only reduce your trading size so much in futures. In forex you can get down to a penny a pip if you wanted.
