Rules that backfired · Lesson 17
Tighter stops did worse on my trades
The backtest · same dollar risk
- Tighter stop
- more shares
- A stopped-out trade
- same loss + more fees
- Winners
- stopped out before they ran
- Verdict
- worse than my stops
"Tighter stops sound safer, but on my trades they did worse."
▶ Watch the ShortWhat it taught me
I thought my stops were too wide, so I backtested my trades with a tighter stop loss.
At the same dollar risk, a tighter stop means more shares, so a stopped-out trade loses the same amount with more fees, and my winners got stopped out before they could run.
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