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No. of Recommendations: 5
If you are really going to do technical short term trading, then you should have an entry and exit strategy going into every trade, with contingency plans for what you are going to do if the price goes up and what you are going to do if the price goes down. If you are just winging it day by day, you are going to end up in trouble at some point. A great comparison someone gave on another board years ago was to a baseball fielder, where you don't necessarily know where the ball is going to get hit. You may have an idea of probabilities, but you have to have a plan in mind of what base you need to cover or throw to depending on where and how the ball is hit.

Traders use stops to keep losses small, and to protect gains when you have them. Yes, you will get stopped out early sometimes, but that is part of the deal. A big loss is a lot to try to recover from.
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