Figure 4.14 The profits (upper line) increase as the initial money management stop is loosened. The lower line is the maximum intraday drawdown. Data are for the live hogs market.
In summary, adding an initial money-management stop is useful from a risk-control point of view because it reduces the largest losing trade and the maximum drawdown. But, it also cuts off some winning trades, and hence total profits are lower over the long term. You may add a dollar stop or a volatility-based stop, but both must follow sound guidelines.