real world stops and risk reward ratio. | Psychology and Money Management - futures trading strategies, market news, trading charts and platforms

Psychology and Money Management

This forum is where successful traders spend most of their time and where struggling traders never visit. The psychology and money management forum is where you learn to become a profitable day trader


real world stops and risk reward ratio.

  #11 (permalink)

south africa
Posts: 170 since Dec 2018

This is the best thread I have ever found on stops. Every time I read it I found something new and interesting (keep in mind Nuclear Phynance sorts the thread backwards for some annoying reason)
Nuclear Phynance

"The concept is very seducing in itself: it looks like you might be able to cut-off tails of your distributions. However they always omit to mention that you have an uncertainty on the stop-loss itself, a P&L distribution of its own"

"If you need a stop, your trade is too big"

Those two quotes really changed my trading.

If you buy a call options you don't use a stop. You plan for what happens if the option expires worthless before you make the trade and size the trade accordingly.

Reply With Quote