Are stops a complete joke ?

Discussion in 'Risk Management' started by zanek, Dec 10, 2010.

  1. And that has to do with "averaging into a losing trade", how?
     
    #11     Dec 10, 2010
  2. emg

    emg



    Personality. Successful trading is based on personality. This is who paul is. Im sure he cheats or nobody will even know.
     
    #12     Dec 10, 2010
  3. So... "averaging into losers" is a winning strategy... IF you have "the right personality"?
     
    #13     Dec 10, 2010
  4. emg

    emg

    That is right, if u know how to add.
     
    #14     Dec 10, 2010
  5. You've outed yourself as either a noob or a fool. Not going to waste time reading anything else you care to post... ON IGNORE!
     
    #15     Dec 10, 2010
  6. Eddiefl

    Eddiefl



    +1
     
    #16     Dec 10, 2010
  7. What about:

    1) Set multiple stop levels so that the average is your desired stop. You'll have some units close, and some much farther away.

    2) Use an ATR based stop. I like this one, but it tends to give much wider stops, so your position has to be sized accordingly. It does tend to keep you out of "noise" stop outs but still protect you against a major reversal.

    3) Try a "2-strikes and you're out" approach. You have fairly tight stops and you see that you're hit pretty often but then price takes off. In this case, Trade 1/2 or 2/3 your normal size and as soon as your are stopped, set an order to get back if your stop is hit. If you're stopped again, you're done on this trade. Since your size is reduced, it's not much more than a single stop out.
     
    #17     Dec 10, 2010

  8. +1
     
    #18     Dec 10, 2010
  9. The market is telling you something. Why do you not listen?

    You could frame your observation out in a more productive way, such as:

    "I have noticed that once price drops 2% below recent swing lows, there seems to be a definite edge to the upside."

    Now if you can define "2% lows" you can backtest this observation for different holding periods or exit strategies, etc, to see if your observation is in fact correct.

    Or, you could just start trading this with small size and see what happens.

    Listen to the market and let it teach you.
     
    #19     Dec 10, 2010
  10. I agree, took me several yrs to figure out how to properly add in order to take advantage of the S&P MR structure....I still use an ultimate stop in case of unexpected news but as far as day to day trading in the ES, I find that it always follows the same routine.

     
    #20     Dec 10, 2010