Do you get stopped out too often?

February 4th, 2012, 06:01 PM

Silvester17

don't want to get into a debate. this is just how I see it and how I do it.

- entry, exit: by far the most important and most crucial aspect.

- trade management: if entries and exits are good, then automatically trade management is good too. so for me, not important. if you buy the top, no trade management will help you to make it a profitable trade. you might not lose that much. but to be honest that's not my goal. my goal is to make money.

- money management: not really important, because for me this is common sense.

- psychology: nothing but an excuse. I put it in the same category like money. if you don't have the money for trading, then you shouldn't be trading. same for your mental state. if you can't handle the stress, don't trade.

but don't worry, at least 95% here will not agree with me. which is fine.

"at least 95% here will not agree with me."
I think you underestimate your futures.io (formerly BMT) brothers and sisters....I'm sure many would agree with what you are saying (including me).

February 4th, 2012, 06:32 PM

kbit

I like to identify those "obvious levels" and enter trades just beyond them right after everyone else got stopped....as an example about 20 ticks beyond the pivots on the TF....conditions permitting of course

A valid approach, but of course you miss all the trades where the 'obvious levels' actually held.

February 5th, 2012, 04:43 AM

I agree with Big Mike that position size is key here. If you're trading too large a position for comfort, you need the stop to be so close to the current action that it tends to get taken out during random noise.

Try dropping down to half size or less (this may mean trading ETFs like SPY rather than futures) and see how it feels to give trades more room to develop.

February 5th, 2012, 07:58 AM

aligator

That is true when placing the trade. But then anyone can certainly make it a 100% loosing trade. Sad to say not everyone can make it a 100% winning trade. So, 50/50 applies only to before we push the trade button.

I'm sorry to have to disagree, every trade is not a 50/50 proposition. If this were true then you would have to agree that every setup is irrelevant to the statistical likelihood of success or failure; that the setup phase of a trade provides no edge whatsoever. This simply is not true. Traders have performed studies to show that various patterns and approaches provide varying degrees of statistical likelihood for success/failure with certain contexts such as as time frame etc. To prove this I challenge each and every trader reading this to throw out your setups. On the next trading day skip the "setup" phase of of the trade and just toss a coin as criterion for long or short position and use your trade management approach exclusively to negotiate your way out of your trade. Puts a knot in your stomach I'll bet. You can't and won't do it.

I agree with mikes approach, calculate ahead of time (before entry) where price needs to be to confirm that your assumptions about prices future direction were wrong and protect you from a catastrophic event. BUT make sure that your leverage isn't so big that you are effected psychologically by the loss. Every trader has different criterion about what is catastrophic, and about what point they are wrong on the trade, therefore every stop is unique to the trader and the trade. That is the best approach in my opinion.

February 5th, 2012, 08:12 AM

aligator

That is true when placing the trade. But then anyone can certainly make it a 100% loosing trade. Sad to say not everyone can make it a 100% winning trade. So, 50/50 applies only to before we push the trade button.

trendisyourfriend

He also said that every trade is a 50/50 proposition.

Sorry I used the wrong quote for my previous response :-)

February 5th, 2012, 08:08 PM

I've been to enough trading seminars and the one consistent from pro traders is "you're always half in and half out". Meaning scaling in and out is key. If your normal position size is 2 contracts then enter with 1 contract using a bigger stop, wait for more confirmation in your trade direction before entering the second contract using a bit of a tighter stop. Exit trades in the same way, scale out of 1 then the 2nd determined by your strat, indicators, etc.

Do you get stopped out too often?

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Do you get stopped out too often?