If you are not going to use stops because either (1) you prefer mental stops, (2) the market makers will “steal” your shares, (3) you are afraid of it popping back up as soon as you get stopped out, or some other reason not mentioned, you are wrong—there is no excuse for not using the stops.
You see, small losses are okay and are very easy to recover from and that is what you want when it comes to a losing trade. Being able to put the losing trade behind you and move on to the next trade is key and using tight stops as I have discussed throughout this book is what leads you down the path to successful trading.
There will no doubt be occasions where the market makers steal your shares or you simply get stopped out pure and simple only to witness the stock moving back up to new highs before the day is over. It is frustrating, I know. I have had it happen to me countless times, but that is part of the game, and trust me, I would rather take a small loss from someone who wants to take my shares at a cheap price, than let one of these stocks rip me a new one because my ego was so big that I had to control my losses by a means other than a stop-loss, namely, some belief that I would know before it was too late that I needed to get out of the trade.
When it does happen, though, and traders get stopped out of their trade early on, it is easy to become discouraged. In general, when I am stopped out ...