The habit of moving stops: a log analysis

[Amanhasnoname]

Stop adjustments often happen in the heat of the moment, justified by a reasoning that seems plausible. Widening a stop to give the trade room, tightening it to protect profit, removing it to avoid a stop-out. Each decision has a rationale, and collectively they may destroy the edge.

An analysis is simple. Mark every trade where the stop was modified, record the direction of the change, and compare results with the trades where it stayed fixed. Calculate the average result in each group.

Often, widening stops produces a few saved trades and several larger losses, with a net negative effect. Tightening may reduce profit by cutting winners.

If the data shows that modifications are net negative, a rule such as no changes after entry, except by a predefined trailing method, removes the temptation.

Placing hard stops with the order helps, and making modification require a deliberate extra step adds friction.

Treat every stop change as an experiment, with results tracked.

What is the average outcome of trades with modified stops compared with unmodified ones?