Short excerpt from a YouTube video by Kardec Trader ("Even Professional Traders Make this Big Mistake!", March 10, 2024). The speaker warns against using "mental stops" when trading—arguing these invite emotion and are often not followed—and recommends using placed limit/stop orders so stops execute automatically for both beginner and professional traders.
So for beginner traders, I always say that mental stops are a way of you inviting your emotions in. So if you're a beginner trader who's just placing mental stops, saying, hey, if this trade goes to $9, I will make myself sell this particular stock. The problem with that is, as a beginner, we tend to not follow our stops. Even as some professional traders, we don't sometimes follow our stops. So my biggest thing for traders is have limit stops. Don't have mental stops. Put your stops in and don't rely on yourself. In terms I will follow my stop loss, I will execute. When a trade hits that point, just place your stop limits, let your stops work, and that's it.
