Q: Is it ever okay to use mental stops?
Q: Should you use actual or mental stops?
A: Generally speaking you should always use stop-loss orders or some kind of
well-defined exit. However, if you are an experienced trader, you can place your
stop-loss farther away from the price action, with the intent of using a mental
stop to exit. Then, as a general rule you could watch the price action and and
try optimize your exit using a mental stop using your good judgment. This allows
you to react quickly to price patterns you see unfolding, while having the
stop-loss order as a safety net.