Having tight SL really benefits trend-following systems?

[currencyfxjle]

This comparing the results because most signals have pullbacks

 

[Fin_Trader]

In your trading, you must take into account the volatility of trading pairs, as well as the size of the spread, and the smaller the spread, the smaller your stop loss will be (my broker provides minimum spreads for trading with minimum stop losses, so it is important to choose a broker with narrow spreads) . After all, there are pairs with high volatility, and there are those with moderate or low volatility. Therefore, applying the same stop loss size (for example, 10 pips) for all traded pairs will not be the right decision. When trading highly volatile instruments, such a small stop loss will be constantly activated and the trader will suffer losses. Therefore, it is important to study different currency pairs and their volatility in order to make more informed decisions on the size of stop losses set.

 

[bestnour1116]

In trend-following systems, tight stop-losses can protect against significant losses and preserve capital. However, they often lead to premature exits and increased whipsaws due to market noise. To balance this, traders can adjust stop-losses based on volatility, using indicators like the Average True Range (ATR), or employ trailing stops to lock in profits while allowing trends to develop. Thus, while tight stop-losses offer risk management benefits, they need to be carefully calibrated to avoid undermining the trend-following strategy.

 

[Fin_Trader]

Also, when publishing important economic and political news, strong and sharp volatility may occur and this may lead to the closing of stop-loss orders with slippage and increase losses. Therefore, even when trading on a trend, it is worth monitoring the release of such news and be sure to take them into account in your trading.