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STOPS are Frustrating (SL) ...to take or not to take
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STOPS are Frustrating (SL) ...to take or not to take

  #21 (permalink)
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dont worry i think you werent the only one that day that made the same mistake, i lost 21k that day hoping it will bounce back but blew my account too.

So y dont u try to do opposite of what u are doing i-e. buy instead of sell & sell instead of buy & use your to be stop loss as your profit target and reverse positions once filled... cause u said it eventually moves in the direction u traded .. if u know what i mean & yeah work on your entries & exits. if your entries are good i dont think stop loss is an issue then, & take quick profits never know when it might go against u, that way atleast u made something instead of losing a winning trade...
n e ways good luck
Happy trading

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  #22 (permalink)
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There are two points that might be for your consideration.

One if you trade a less volatile instrument like the ZF you might have better luck with the no stop strategy... I used to do that with the ZF and use daily/weekly charts for the critical stop with a Parabolic.

The other thing is trading like that guy in Boston, who pulls like $1mm a year or something. Scratch a trade if it doesn't immediately move in your favor. You'd have a bunch of scratch trades -$15 or -$5 and one or two big +4pts trades, assuming you're trading for big breakouts or reversals....

I look at stops like hey man you can't be right 100% of the time... and if you were you wouldn't be sharp and know not to step on the bee barefooted.

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  #23 (permalink)
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There are two points that might be for your consideration.

One if you trade a less volatile instrument like the ZF you might have better luck with the no stop strategy... I used to do that with the ZF and use daily/weekly charts for the critical stop with a Parabolic.

The other thing is trading like that guy in Boston, who pulls like $1mm a year or something. Scratch a trade if it doesn't immediately move in your favor. You'd have a bunch of scratch trades -$15 or -$5 and one or two big +4pts trades, assuming you're trading for big breakouts or reversals....

I look at stops like hey man you can't be right 100% of the time... and if you were you wouldn't be sharp and know not to step on the bee barefooted.


The methodology depends on the setup If you are a seasoned trader, not trading for pleasure (high winning percentage), but can stand the pain of losing most of the time, that approach is valid. I bet that the guy is a counter trader. I am not ready to do that yet.

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  #24 (permalink)
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Stop and Trading Plan

I am sure if you respect your trade plan you will not loose 17K or 21K. Never expect that the price will return.
I suggest you use in every trade, I call, a Catastrofic Stop. This one you need to use ever. Is good untill if the energy fail.
You can use a mental stop wich is in your trade plan and respect it.
All the best
Barrosco

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  #25 (permalink)
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Here is a link to an article by Tim Morge about the use of stops and where to place them -

http://www.medianline.com/articles/Do You Have a Love Hate Relationship With Stops.pdf

Mahlon


Last edited by mahlonhersh; August 28th, 2010 at 11:30 PM. Reason: Link
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mainstream View Post

The other thing is trading like that guy in Boston, who pulls like $1mm a year or something. Scratch a trade if it doesn't immediately move in your favor. You'd have a bunch of scratch trades -$15 or -$5 and one or two big +4pts trades, assuming you're trading for big breakouts or reversals....

There must be more in his system than just that.

If you count the commissions and the volume he has to do to make a million a year that means that he uses more contracts meaning that his massive losses are more likely $150, $1500 or $15000 a tick.

People who take millions out of the market every year are trading in huge volumes. I don't think we have many retail traders trading those volumes. I would say it's close to nobody.

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Maybe off topic.

For those of your who hate stop, do you also hate target as well? I am sure everyone have experienced that as soon as your target is met, price took off to another extreme.

My point is, we as traders, have already determine the risk and profit before we put on our trades. I think 8 out of 10 cases when we get stop out is our entry is just wrong.

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  #28 (permalink)
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Here is another article on placing stops.

Mahlon

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  #29 (permalink)
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"Before you learn how to make a large amount of money, you must first learn how to lose a small amount when you are wrong." Paul Tudor Jones

Stops are like condoms; we really don't like to use them, but if we don't use them, the odds are we will eventually get killed.

Using stops, whether they are placed physically upon trade initiation or are placed manually upon your mental stop getting elected, is not open to debate. Where to place them, is of course, the eternal debate.

Yes, the better the entry, the closer you will be to the point of " being -wrong- the- market", and yes, having a good idea of what your target is, will help you determine an appropriate risk-reward ratio. But most important, is accepting the fact that stops are a necessary and intrinsic part of trading.

What I do:

1) I don't trade my P&L, but I do try to establish an acceptable risk/reward ratio

2) I attempt to place my stops where others don't

and the best way to offset getting stopped out...

3) I add to my winners by "pyramiding", and try to let them run as far as possible


"We did not all come over on the same ship, but we are all in the same boat." Bernard Baruch



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hatorihanzo View Post
So ive been trading ES for a few years now and i must say, i have truly mixed feelings about taking stops.
.....

I don't know your experience level but if it's not years and years, you might want to consider more of a 'swing' approach with smaller positions via ETF's instead of the stock index futures, managing your risk with position sizing and time. This 'usually' works, except during the Black Swan events, like London getting nuked or an Asteroid hitting NYC.

While doing the above, you could spend lots of time manually pouring over historical 2/3/5 minute charts, trying to figure out what works best for entries, in what market context, maybe spending extra time focusing on the first hour of trading.

Day trading is the hardest trading there is unless you have heavy experience that allows you to take VERY selective and great entries. But once you're good at it, futures are definitely a great way to go, assuming you're not over-leveraging.

"The Future Ain't what it used to be"
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