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STOPS are Frustrating (SL) take or not to take
Started:August 6th, 2010 (01:37 AM) by hatorihanzo Views / Replies:15,490 / 113
Last Reply:March 10th, 2012 (07:21 AM) Attachments:3

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STOPS are Frustrating (SL) take or not to take

Old April 19th, 2011, 03:37 PM   #61 (permalink)
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Keep using stops. They're good for you. Read more news, become more familiar with the cause and effects of the market.

I suggest looking at daily economic reports released by Report Schedule. They are news makers. If you see what's scheduled for the next couple of weeks you will gain a better understanding of what kinds of news to expect. Weather positive or negative is still unpredictable but the fact that you know the TYPE of news it will be will prepare you better.

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Old April 20th, 2011, 03:21 PM   #63 (permalink)
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Barrosco View Post
This guy have a diferent look about STOPS:
Incredible Charts: What's New: Stop Losses ? Help or Hindrance?

When you get right down to it, 'day trading' with stops and quick profits is by far the toughest trading possible. If you are using size, you have to have great entries and you HAVE to use stops because otherwise, your capital will eventually get some unacceptably big hits when the market goes against you.

You could however, cobble together a reasonable long-only dip buying 'swing trading' system utilizing stock indexes that uses conservative position sizes and a high level of selectivity on the entries and does not do any buying during panicky selling. You would however, only buy after weakness up to a conservative % of your total capital and you would scale-in on more weakness, up to a point.

You could do this with no stops if you didn't have more than a conservative x % of your capital committed at any point. The tough part then becomes figuring out when to sell and you could still flip stuff over in day trading style, during certain market conditions. The one weakness of this or any other buy/hold strategy is being exposed long to any degree during a black swan event that closes the markets down. Of course, you have to have some capital behind this to make it viable for making decent amounts of money.

Anyway, this is what I am working at because let's face it, buying the dip with stock indexes usually works in the longer run IF your entries are excellent and you are willing to take 'some' profits on the way back up, never having your inventory get to be too large.

I hate stops and I hate risk.

"The Future Ain't what it used to be"
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Old April 20th, 2011, 04:41 PM   #64 (permalink)
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That is why it is of my opinion that stops should be discretionary and not used
systematically. When I enter a trade and it starts to move, I am watching the tape
and the order flow as well as price (duh) + volume. Treat stops as if you're a painter putting
the finishing touches on your picture. Stops are the last part of the equation (for a day trader)
that separate the winners from the losers.

The initial placement of my stop is based on my method and has an exact spot but it's not always
the same % or ticks away from entry.

This is what I think and feel from my 2 years of experience as a trader. I have a lot more to learn
and am always willing to adjust as I'm open minded to new ideas and concepts.

Anyone use a discretionary style?

I know one of the greatest day traders ever used a fixed dollar stop (Martin Schwartz)

Last edited by Massive l; April 20th, 2011 at 06:08 PM.
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Old April 22nd, 2011, 05:20 AM   #65 (permalink)
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Futures Edge on FIO
Placing SL above/below daily high/low gives you an statistical advantage since the market have limited ability to take change its daily trend. I use a few more criteria's like the size of the SL should be less than 40 pips.

Stop loss location can be a frustrating challenge for aspiring daytraders, seeing their beloved SL being "hunted" down in a flash. If you enter your positions by technical analyses, you should exit by it too. Like surgeons doesn't stop operating after a predefined time, random predefined numbers (i.e 50 pips) for SL will most likely reduce your performance.

Here is an example how using last swing low/high would have shaken my long position out if I didn't hide SL outside the daily range;

"We may not be able to control the wind, but we can always adjust our sails"
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Old April 26th, 2011, 11:23 AM   #66 (permalink)
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Love my small stops. Don't like them at the time, but at the end of the session when I see how my small stops kept my losses tiny and my profits nice, I feel proud. Like yeah, I did that. hah.

Most of my stops are tiny and place them based on momentum. So is discretionary. Though if I take a full stop (around 6 pips) I aim to place it above/below recent s/r.

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Old April 26th, 2011, 01:49 PM   #67 (permalink)
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Guys, please keep using your stops as before, it's 1 of my favorite trading techniques, hunting them down that is !

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Old August 25th, 2011, 08:37 PM   #68 (permalink)
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Some traders are mandated to use stops, usually in the case of a bank proprietary trader. Some traders do not have such a mandate.

For reversion systems, I always found it most comfortable to start with a wide stop, and quickly tighten down the stop to the pivot point closest to my entry after a certain amount of profitable ticks have been made.

For trend continuation systems I am most comfortable using a trailing stop.

I am a big believer in black boxing systems while still have a manual override capability to change the stop or trailing stop.

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Old September 26th, 2011, 02:52 PM   #69 (permalink)
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finding a GOOD STOP is like finding a MED for cold

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.

ive tried a million angles to work this right and it just never seems to work out right. These are the 3 scenarios i am faced with every single trading day.

1. When you use a tight stop, lets say 8 ticks, the mkt comes back to stop you out by 1 tick and then goes your original way, whether long or short.

2. When you use a wider stops. say 16 ticks, the mkt comes all the way down there to get you for an even bigger loss, in which case, you were better off using the 8 tick stop. (it feels like there is someone looking over my shoulder as i am placing my stops and so they KNOW where i put it so they can come down to get me out)

3. When you use NO stops, the market CRASHES ( May 6 ) or if you are shorting, it will rally 30+ handles and leave you with a HUGE LOSS.

What is a trader to do?? Taking stops is like SLOW DEATH of your account..just delaying the inevitable...and NOT taking stops is like getting wiped out clean in a single day. Both has happened to me. I lost over 10k over the last year using stops, only to see most of those actually go the way i originally planned.

So in Mar and April of this year, i decided on NOT using stops. i would buy lower at incremental levels, like -10 etc. worked great for 2 months, and at the min, got out breakeven on bad days.....Then comes May 6, unsuspecting of what was about to happen, i did what i started doing...then all of a sudden, i found myself long 12 contracts and $17k loss in 10 mins...closed out at the lows, only to find that had i waited a few more mins, i would have had gotten out BE.

anyhow, id appreciate any feedback on STOPS, and how to use them, because it seems that ur doomed if u dont, and ur STILL doomed at a slower rate if u do.

i lost 10k over 12 months and 17k in 12 mins...i have no clue


finding an effective stoploss is very much like trying to find an effective dose of med for cold.

as far as my personal experience is concerned, there is none to be settled on as yet to date.

traders who have survived through rough beginning will testify that it is naive to expect market conditions to conform to your own set of perfect setups, expectations and formula.

as a trader, the moment you stop exploring the complementary possibility to whatever setups you have been successfully using in the past decades, you'll also discover that whatever targets that have been so effective will also begin to fade away from you.

hatorihanzo, some traders started out experimenting with 21 tics in day trading, then gradually tightening up to 19, 16.... 9 and 4... at present.

but only a fool would set the stoploss at 4 consistently to trade across the market conditions.

on the other hand, it is also inconceivable to change stoploss as you trade along which would be like flying without a flight plan, so to speak.

my humble suggestion would be for you to sim out the range for each product you choose to trade, and set your personal fortune plus or minus a few tics above or below that range.... like many who trade for a living do.... all the time.... in order to survive....

hatorihanzo, wish you good hunting and good fortune as well. many traders use stoploss less than 10 tics effective, but i suspect only a small percentage of that group would effectively use 6 or less to trade profitable AND consistently. i do hope the distinction between stoploss of 6 tics and the stoploss set at plus or minus 1 or 2 above or below previous bar, is clearly perceived to avoid subsequent misunderstanding and argument.

if anyone have any doubt if or whether it is probable even to trade with 4 or 5 or 6 tics stop, the attached pix taken today, 2011/09/26 right after lunch at 13:48:11 and lasted only 34 seconds, will provide some clues to its possibility.

good trading everyone. (my apology for not reading thru all the rich and famous posts, before replying, my better half only allows me a few minutes break every now and then )

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Old September 26th, 2011, 03:17 PM   #70 (permalink)
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neke, oh my dear neke.... whereforth arth thou....?

aslan View Post
For starters, there is no one looking for "your" stop. Do "they" run stops from time to time, yes they do. Why? Because they know where all of the stops are and it is just a short term liquidity trade, as they move price to either load up or take profits at better prices.

How do they know where the stops are? Just look at a chart, all of the stops are around the pivots or an even number of points from the pivots. Market profile/Cumulative Delta can also show some interesting levels. So, if everyone knows where they are, how do you fix that? You don't, because it does not matter. Stops are there as protection, to stop you from blowing out an account in 12 min. You always want to live to trade another day.

Can you use big stops to avoid the short term games? Yes, but you still have to have that protective stop somewhere, and it should fit your money management plan, because you should take that stop when it comes. If you have good high probability entries, then this approach can make more sense, but you are really just consolidating all of those smaller losses into an occasional larger loss. Backtesting can tell you if it makes sense, but you also have to decide if psychologically you can actually trade this way, as you can not pull/move that stop as it approaches.

Finally, can you trade with no stop? Yes, it is really just an extension of using a really big stop, but based on your account size and money management you are playing with fire. It only takes one time and you are out of business.

At the end of the day, you need good entries, and a stop that keeps you out of the short term volatility while your trade remains valid and plays out.

my highly esteemed aslan, agree with you completely.

reminding me of a trader by the name of neke....

only if everyone could read neke's trading journal.... with understanding and sympathy....

he/she successfully traded to around $600,000 from $40,000+ as currently reported.

but as of his/her last report last week, the balance is still positive but at around $196,000 or so....

and many traders are encouraging him/her to stop and to reexamine and reevaluate his/her setups, hoping that the acct would grow and multiply later.

he/she seems to have taken none of the suggestions so far.

perhaps, if he/she could read your post, it might turn things around.

aslan, thx.

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