Question 59—Soft Stops
Answer 3 They help avoid whipsaws.
A hard stop goes into the market as a specific order. A soft stop is the number you keep in your head. System traders must use hard stops, as do all beginning traders. Experienced discretionary traders may use soft stops in order to reduce whipsaws. Both hard and soft stops take the same amount of work and belong on the same level—their placement is identical, only the execution is different.
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