2% stop loss rule?

Discussion in 'Risk Management' started by turkeyneck, Apr 25, 2018.

  1. qxr1011

    qxr1011

    but it does, limiting exposure to it it by the percentage of capital
     
    #21     Apr 26, 2018
  2. qxr1011

    qxr1011

    and when u said "It certainly wasn't aimed at day-traders."

    imho it should not be aimed at anybody :)
     
    #22     Apr 26, 2018
  3. tomorton

    tomorton


    Mate, look, the two approaches are not mutually exclusive but you speak as if they are. In fact they are complementary.

    Surely we don't have to go over the definition of the 2% rule?

    Especially when we both agree that the entry-stop distance should be derived by TA or volatility/range, NOT capital available to put at risk.
     
    #23     Apr 26, 2018
  4. tomorton

    tomorton


    I don't know about this and I'm not qualified to say, not being a day-trader, whether they should use it or not. However, reading what Alex Elder wrote its clear that he did not intend the rule to be used by day-traders.
     
    #24     Apr 26, 2018
  5. qxr1011

    qxr1011

    the two approaches are mutually exclusive
     
    #25     Apr 26, 2018
  6. qxr1011

    qxr1011

    if i substitute the 5 minute chart of qqq with 5 days chart one should not find the difference

    which means that the distance form entry to stop (in the scale of the market) will be identical on both charts

    which means the 2% rule would have similar effect and similarity should not be used
     
    #26     Apr 26, 2018
    beginner66 likes this.
  7. tomorton

    tomorton


    Please, don't keep making the same mistake in public. I think you may have misunderstood what we're discussing and you might think that the 2% rule means that you calculate what you can afford to lose (comprising 2% of your account) and then set a stop that is a random number of pips or points back from entry to fulfil that stipulation. This is not what Elder said but I'm guessing you don't have and haven't read his book, so you have been misled by others who haven't either. Am I right?
     
    #27     Apr 26, 2018
  8. tomorton

    tomorton


    Well I'm not going to argue on this, I don't day-trade, but I've no reason to think you're wrong.
     
    #28     Apr 26, 2018
  9. qxr1011

    qxr1011

    i responded to the op question:

    ===I read 2% capital (account size) stop loss per trade is the "sweet spot" for most traders. Does anyone run it tighter or looser here? If so, what % capital stop loss do you use?====

    where that 2% crap came from?

    yoyu said form dr. elder

    i have not read him but this rule is wrong

    u understand now what i am talking about?
     
    #29     Apr 26, 2018
  10. qxr1011

    qxr1011

    here u quoting dr. elder?

    i am responding to that as well

    this is wrong
     
    #30     Apr 26, 2018