The Break Even Stop is a Psychological Crutch for Newbies

Discussion in 'Psychology' started by Buy1Sell2, Feb 21, 2015.

Do you use break even stops?

  1. Yes

    50.0%
  2. No

    50.0%
  1. Turveyd

    Turveyd

    A BE trade or there abouts, is a Null Trade, you risked X for making ZERO, don't get me wrong sometimes it might be the right call, but most of the time it's hit and the market reverses and you could of taken a small profit if nothing else shortly after.

    You may of exited at Zero, but you have to make another trade sooner or later, that has spread / comms, SL risk all over again, as you've already accepted the risk, why not keep some risk on ( reduced maybe ) and see if it can run.

    SL, should be at a turning, point, if market breaks XXXX it will drop quickly, so SL just into that.

    Same with SL's which are too tight, how many times are they hit just to reverse, just from a bit f meaningless noise.
     
    #31     Feb 23, 2015
  2. taowave

    taowave

    For the life of me,I can not fathom why these threads exist with strong opinions and not a single shred of any credible statistical analysis validating ones beliefs.
     
    #32     Feb 23, 2015
    eusdaiki likes this.
  3. Turveyd

    Turveyd


    Errrm it's a BELIEF end of story.
     
    #33     Feb 23, 2015
  4. Autodidact

    Autodidact

    That would be hard work, how many are willing to share hard work for free ? That is probably the answer to your question.
     
    #34     Feb 23, 2015
    Buy1Sell2 likes this.
  5. lindq

    lindq

    I can provide you with the analysis of 14 years of trading and experience. I've set hundreds of break-even stops (because I'm much too risk averse), and in the vast majority I've been very sorry I've done so.

    I just did it again today, and missed a 2-point move off the bottom on TNA when I moved my stop to break-even and got hit. I had my reasons for doing it today, but still, it was a stupid thing to do. And it nearly always is.

    Day-trading is not about saving a small loss on a single trade. It is about maximizing equity growth over time. And break-even stops are counter to that objective.
     
    #35     Feb 23, 2015
  6. Autodidact

    Autodidact

    The market, in my humble opinion, has something in it's DNA that makes it oscillates to a turning point more often than not hunting for break even stops of typical entry signals.
     
    #36     Feb 23, 2015
    Turveyd and fortydraws like this.
  7. Turveyd

    Turveyd

    That very same oscillation is how I profit.

    But without taking the profit, it will ofcourse go towards the SL / BE, it's about taking the profit before it turns on you.
     
    #37     Feb 23, 2015
  8. Autodidact

    Autodidact

    Perhaps better to wait until it actually takes those stops before entering, once it does, if it does it again, most probably you are wrong. In other words, enter after the break-even stops were hunted, this of course means you will miss a trade where no stop hunt is done due to exhuberant strength.
     
    #38     Feb 23, 2015
  9. Turveyd

    Turveyd

    The down/up spike, which quickly reverses, is generally the SL's being hit before it reverses.

    Take the reversal, SL just under the SL hitting low incase it's wrong.

    1 of my setups!
     
    #39     Feb 23, 2015
  10. Autodidact

    Autodidact

    Ya I know what you mean, aware of the setup concept.
     
    #40     Feb 23, 2015