Really sounds like you'd be better off cutting your lost time with your trading efforts, getting a job and squirreling money away into an index tracker. It can be easily demonstrated that stop losses are an excellent way of randomising your results, and when you win a little and lose a little you get precisely nowhere. There are better ways of controlling risk. But thanks for the insight into your trading performance.
Reckoner Registered: May 2004 Posts: 43 06-19-06 08:38 AM -------------------------------------------------------------------------------- Quote from roctrend: trendmomentum THATS WHY WE CUT OUR LOSSES! at predetermined levels. .... you win a little , lose a little, win a lot, but NEVER want to Lose A lot....NEVER....takes too long to make it back... Never a lot. -------------------------------------------------------------------------------- Really sounds like you'd be better off cutting your lost time with your trading efforts, getting a job and squirreling money away into an index tracker. It can be easily demonstrated that stop losses are an excellent way of randomising your results, and when you win a little and lose a little you get precisely nowhere. There are better ways of controlling risk. ----------------------------------------------------------------------- Reckoner Registered: May 2004 Posts: 43 06-19-06 08:38 AM -------------------------------------------------------------------------------- Quote from roctrend: trendmomentum THATS WHY WE CUT OUR LOSSES! at predetermined levels. .... you win a little , lose a little, win a lot, but NEVER want to Lose A lot....NEVER....takes too long to make it back... Never a lot. -------------------------------------------------------------------------------- Really sounds like you'd be better off cutting your lost time with your trading efforts, getting a job and squirreling money away into an index tracker. It can be easily demonstrated that stop losses are an excellent way of randomising your results, and when you win a little and lose a little you get precisely nowhere. There are better ways of controlling risk. ============================================== Actually I dont remember the last time i had a losing month, let alone week, in trading okay Vic or Vicky Wannabe. I think its OBVIOUS though you cant answer the MAIN Questions brought up on this thread. You resort to the Vic barbs he is famous for on his rhetorical attacks on successful investors. Answer the question. Why in a healthy correction in a bull market since 02-03 does Vic have a nearly 30% monthly drawdown ? 1/3? Dont justify his 3 year track record, unless you go back 10 years which is more data points that enhance the Statistics, Yes? Its pretty well known he can only trade the S&P and its options obviously in the new Fund. Why doesnt he hedge if no stop/loss? So your point is that since Vic was probably averaging down into a losing position, if the correction carried lower into a panic selloff below 1200, due to some event like 9/11, its ok? You justify that?. Poor Vic, wasnt his fault, nonrandom event. Why are their Risk managers for the Greatest? He only trades on market. What do they do ? Answer threads on ET? They are no obviously limiting drawdowns, and preserving gains for the year. Selling S&P naked puts work great until they actually BLOW UP in your Face again Vic or wannabe? Which are you?
IF you test any kind of system (which I figure you don't) you'd see that stop losses invariably limit performance. I don't see why you're taking it personally, it's just reality. And I wasn't discussing VN/naked puts etc, I was discussing your apparent insistence that stop losses are the only way and that anyone who doesn't use them is a fool. An absence of stop losses is not the reason traders go under. Try 'too much leverage' or 'death of a thousand cuts' (ie the USE of stop losses gradually eroding someone's capital by giving them a DEMONSTRABLY LOSING METHOD) and you'll be a lot closer to the truth.
Where is the evidence for this claim? Using stop losses sometimes is a "demonstrably losing method," but other times it is not. There is no universal truth here. It DEPENDS. It depends on where one puts the stop loss. It depends on how quickly or slowly the market is moving. It depends on the liquidity of the market one is trading. Not all stop losses are alike. If you had quantified this yourself, you would have realized this. A stop placed poorly can make an otherwise profitable system a loser. A stop placed effectively can make a breakeven system a winner. This can be demonstrated. I invite you to go to WealthLab and try it yourself.
Well I take my hat off to you, I have tested a lot of systems but haven't found one which worked better with a stop loss. Of course perhaps you are artificially optimising your stop losses in a curve-fitted kind of way, which might well work on past data. That would certainly explain why you have little faith in past performance being a predictor of the future, you ain't testing properly...
guys... any way to make the discussion beneficial to newbies like meself etc as far as statistical testing methodologies, universes etc? thanks!
Once again, you are making claims that you have not supported with evidence. Now how would YOU know how I test? You state that "I ain't [sic] testing properly," but how do you KNOW that? Are you saying that using stops ALWAYS makes a system less effective? If you are, then that is demonstrably and empirically refutable. All I need is one example. Sometimes having stops makes a system less effecitve, sometimes it doesn't. This is demonstrably and empirically verifiable. The type of mind that craves certainty and hates ambiguity should not be trading. Mathematics might be a better field of inquiry. The reason why I don't have blind optimism that the future will necessarily reflect the past is because I don't KNOW what the future will bring. The present usually looks something like the past--that's why I try to learn what happened in the past. One more thing, for now: Of course systems that tested well in the past are tested on past data. Are yours tested on something else?