Unless you are trading fairly large size, I don't understand the attraction to ES. As indexes go, it has about the worst risk/reward profile. As for the remainder of the argument:
I agree, or put more simply, why not just place your initial entry wherever you would've in the past put your stop? You may miss a few entries, but you'll make sure you get in at true bargain prices when you do get in, and should be less likely to get stopped as well.
Pretty simple. Stops aren't what they used to be... With HFT's on the prowl, I had to adapt to mental stops for equities and options. If I'm going to get robbed, I'd rather it at least be from a human freaking being and not a HFT bot.
You entered the swing trade before price signaled an entry. BAC was falling and you tried to catch a falling knife instead of giving up a little on the entry in order to enter based on price action. You'd want to get long if price broke through 11/29's high. So your BUY stop is placed at 11.37. On 11/30 price breaks down support and your swing long entry is never triggered. On Dec 2nd price demonstrates enough strength to break through that 11/29 high and you're taken into a long trade at a much safer place. Instead of trying to pick tops and bottoms, let the money that moves the market take you into a trade in the direction of the move. Your protective stop then follows the previous day's low or pivot low depending on how you're handling your swing trade.
Zanek, I told you you're a dumb Polak. There is only one way to place STOPS - and that is the way Bruce does it ..... place 'em where they are hard to find by even the most ambitious hunters. This applies to anybody OUTSIDE ET but it is being posted by me at ET - this alone cofirms I should have my head(s) examined ... In an established uptrend (for example) place your STOP 3-5% under the most recent wave low. If you want to blast all hunters out the door, place the STOP under the penultimate wave low, and then raise it thusly as the trend progresses. Now go ahead and fck up this simple concept.
Thanks for the replies all. NoDoji, you're correct, I think I pulled the trigger to soon, as a part of me wants to catch the entire move. Argh, its hard to kick this habit :-( Deadbroke: placing your stop that low exposes you to a large loss (3-5% + difference of entry price). How many times have you been hit with that super low stop ? I definitely agree that I'm somewhat of a weak hand most of the time and am trying to protect my capital. I'm going to try and trade smaller size, wait for confirmation and listen to the market. I'll also start placing my buy orders where my stops are. Its funny how much greed causes me to get in to soon and to make me not want to miss an opportunity, and fear of losing capital causes my stops to not be lower. Picking tops & bottoms has to be the worst habit ever. Natures instincts working against me I suppose.
What i have learned is that with phenomenal reading of markets you do not need to use SLs. SLs are highly overrated. However, mind you only after phenomenal reading of markets, SLs should not be used in day/swing trading. Far SLs can be placed for black swan events like assassination etc but these are once in a lifetime events.