We all dream of hitting the BIG trade, but as Tom and I have mentioned before, the smaller your account the tighter your management needs to be. Obviously you would not trade a $5K account the same as a $50K account, although there are plenty of people who try (and many more who advocate you should...but that's another story).

Your time frame will also determine your stop management to a degree. Tom can keep a much tighter stop than I can because he manages his trade intraday. Since I need to allow for daily price ranges I have to be a little more relaxed with my stops, but we both manage our stops to protect accumulated profits as much as possible.

The type of market you're trading has a lot to do with whether you should trail a stop or not as well (in respect to position trading). If you are in a strong trending market, that doesn't get too volatile (ie. Eurodollar), then you might consider trailing a stop; however if you're in a market that likes to chop and reverse on itself and one where the risk amounts can be quite large (ie. unleaded gas, cotton) then why would you want to trail a stop? Keep those stops tight in those markets and use profit taking orders to take as much out of the trade as possible!

You all know that might stops tend to get pretty tight when I've got about $500 in accumulated profit in a trade. That's my pain-threshold, and unless I've got a good reason to keep the stop back I'll usually bring it in pretty tight (or use a profit taking order). Sure you might miss a big move occasionally (although you're likely not to miss the whole move, just chunks of it) but you're a small trader then survival and growth of your account should be your #1 trading priority.

After all, do you want to be right or do you want to make money?

Erich
http://www.tradershelpingtraders.net
http://www.supportandresistance.com