Daytrading Without Stops

I don't have the specific results. I know he ran the tests many times, something like 60 or 80 times (since the entry is random each one suppose to perform a different way) but the results were surprisingly consistent, around 38% if I remember correctly. One of the principles was to enter only with the trend, that might be a daily trend or a momentarily trend (I think it was 3 higher lows or 3 lower highs). It is very interesting I will try to see if I can dig more details.

TM Trader

 

Why? Stop-loss is a very important issue.

 

Some men you just can't reach.

FRuiTY

 

I think that doing without stops is a great idea. I sincerely hope that everyone begins following this policy on Monday morning.

 

Over a larger dataset, the success rate of this should be 33% for breakeven, minus commisions. I've computer tested this kind of thing over huge data sets of random fluctuations. Similarily, a 2 pt target and a 1 pt stop-loss would have a success of 50% for another breakeven...and so it goes with any other ratio. At least that is the conclusion of my research of random entries in a random environment.

JohnnyK

 

Johnny, I'm sure you meant 25% and

33%.

 

Here is a hybrid method:

Suppose you look for setups on ES where you are targetting 4 points and you would be risking 2 points. However, you don't put a hard stop in at the 2 point loss. Instead, you put in a hard stop at a 3 point loss. If you reach a 2 point loss, you get out of the position on any 1 point ES retracement in your favor or until your hard stop at a 3 point loss is hit.

The point of something like this is to take advantage of the many whipsaws in something like ES, especially when stops are triggered.

Comments?

 

Yes, I may have. What I meant to say is that with a 2 pt target and a 1 point stop, you'ld hit twice as many stops as targets for breakeven. With a 3 pt target and a 1 pt stop, you'ld hit the stop three times as much as the target. And so it goes...

JohnnyK

 

All I know is that when everyone is in agreement about the markets ... A backtest would sure be nice.

 

Can't reach me on what? That not using stop-loss is better? More profitable? Please explain to me how a system that don't use a stop-lose is profitable in the long run.


How far are you going to ride a losing trade? 8 points, 20 points, until you lose your entire account? Where is the edge without using any kind of stops? How do you handle risk/reward?


I never said that using hard stops is the only way to go, actually I move my stop-loss at times, the same way I move my targets when it is required.

TM Trader