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_PD_
Registered: Feb 2007
Posts: 32 |
10-04-12 11:12 PM
I am careful about stops, i.e. I don't like to set them at all, for fear someone will see them and take them out for me.
Today I was busy painting my house and didn't want to be looking at my monitor all afternoon. I set a couple of pretty tight stops, not where they wouldn't be hit, it was OK with me if they were. I had these two positions I've been on the fence about for several days. They weren't big money makers and I set the stops to breakeven. I also considered
selling them before I went outside, so I wouldn't be bothered.
Both stops were hit, to the penny, at the low of the day.
Now I'm a big boy and I'm not ticked; this has happened to me before, several times over the years. My question is, how likely is this to happen? To BOTH of my stops? OK I admit I'm a little bit pissed. How pissed should I be?
Have at it.
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Occam
Registered: Apr 2009
Posts: 471 |
10-05-12 04:27 AM
I would never use stops -- they are probabilistic suicide when it comes to trading, especially when it comes to market stops in the current equity markets, which mathematically guarantee bankruptcy over a long enough time frame. Eventually, you're certain to get filled at .01 (if long) or XXX,XXX (if short), and if the trade isn't busted, you're finished.
If I were feeling the need to use stops, it would mean that I was either overleveraged or underconfident in my valuation of the asset I was trading, both of which would lead me to call into question why I was placing the trade at all.
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DeeDeeTwo
Registered: Dec 2007
Posts: 623 |
10-07-12 03:42 AM
Quote from Occam:
I would never use stops -- they are probabilistic suicide when it comes to trading...
Until you understand this... stick to painting.
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tomahawk
Registered: Apr 2007
Posts: 1952 |
10-07-12 04:42 AM
Maybe you got picked off for a reason, or maybe it was just bad luck. Chances are your entry was a somewhat popular entry point, and those are often re-tested after an initial favorable run. IMO don't stop using stops ... it's the only way I know of to keep losses small, and you can't win every time. Just work on picking better stops (better entries can help with that too). The B/E stop is usually an easy target, from my experience.
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