Unusually small stop loss

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I know everyone has a different approach, strategy and preference when it comes to stop loss orders. I have come across several forum posts or blog posts where traders set a stop loss order less than 10 pips away from their entry. I know scalpers keep them tight.

I am just assuming that placing it at 10 pips or less often leads to a trade being stopped out way to pre-mature, but again that is my opinion. It also appears that you are more down the gambling path with a stop loss which is too tight. On the other hand I guess if you get stopped out too early in 90 trades out of 100 and used 10 pips you have lost 900 pips and if your 10 profitable trades earn 100 pips you are profitable in your account (assuming you trade the same lot size), but then you are not a scalper.

I know it is possible from a mathematical point of view and those who can risk 10 pips to make over 100 on a consistent base, not bad and keep it up. I do think that unfortunately there are more traders who risk 100 pips to earn 10 pips. Your Thoughts?

 

Isn't it different : that scalpers usually do not use stop losses at all and they use very tight take profits?

 

Small stop loss are much risky because every time market moves around 5 to 10 pips so it is a type of sure loss if we use 5 or 10 pips stop loss. There should be a margin to market move when we use stop loss .

 

Stop loss limits us.

 
mistersmith14:
Stop loss limits us.

Depends how are you trading. If you are scalping, it limits you. If yo are having a calculated money management then a stop loss is the essential part of the system and you can not trade without it

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