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LearnToTradeTheMarkets.com published a very interesting article advocating Why You Should Almost Never Manually Close Trades. This post goes into detail examining that most traders “self-sabotage.” In other words, traders are their own worst enemy. They get emotional when trading.
This is one of the main reasons that CloudQuant uses algorithms. The use of stop loss orders, and programmatic reasons to enter or exit the market are essential to our trading strategies.
“If you manually close a trade when it’s against you, you are voluntarily taking a loss. Read that last sentence again, maybe even a third time. Trading is about maximizing your winners so that they offset your losing trades, that’s how you make money. You’re going to have losing trades, but you don’t need to voluntarily take them, most of the time.”
An example of using programmatic stop loss and programmatic profit taking are included in several of the CloudQuant public trading strategy scripts written in python.
Read the full posting on LearnToTradeTheMarkets.com