Rules that backfired · Lesson 20
A breakeven stop would have thrown out 40 to 70% of my winners
The breakeven-stop test
- Winners that came back to entry first
- ~40–70%
- Setups tested
- 6
- Lost money on
- 5
- The sixth
- too small a sample
"About 40 to 70% of my winning trades pulled back to my entry price before they went on to win."
▶ Watch the ShortWhat it taught me
A breakeven stop is a stop loss that moves toward your entry once a trade is up a little. About 40 to 70% of my winning trades pulled back to my entry price before they went on to win, so it would have thrown those winners out.
I tested it on 6 of my setups and it lost money on 5; the sixth was too small a sample to trust.
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