We are on the same page. Rather than using a stop, hard or mental, I use a what I call a stop trigger. The price has to trade below a certain level to trigger a stop and then a hard stop is entered in the market. Hopefully this prevents being stopped out if stops are hunted and keeps me in trades that gap down then recover. The majority of my decision making is done when the market is closed. Way less stress. I sppose we are doing the same thing just different semantics
The New York floor trader who is now retired said the market makers hunted the stop losses. Best time to buy according to him is when the stop loss is taken out. Any dips will be temporary because buying will come in to take the cheap shares of stock. Then, when it starts to move higher, put a hard stop loss in for protection. That stop loss will not be taken out because all the buying is driving the share prices higher, away from the stop loss.
Then what triggers an entry? For me I look for a pullback then a bar that closes near its high and enter when price moves higher than the prior bar. My stop trigger would be when price moves below the swing low. Hard stop is below the bar that breaks the swing low. MSFT is a good example. Are you suggesting that I wait for the stop trigger to enter? While that looks to be the right decision today, I have found that my most successful trades just take off and don't come anywhere near my stop.
%% 1] THAT may work well on a strong stock, sure can work well on a strongly trending ETF; even better with shallow pullbacks, in a strong trend, ETFs. A slight variation on that, sure can pay to scale out , with stop losses; that stops selling all @ worst possible time LOL. Much of time I exit, I would not even want to buy with 20-20 hindsight, ETFs But I agree with him buying around a 50dma stop ,can work real well. MSFT/2024 2]People that had anything @ all in a money market; made money the month SPXL topped+ reversed @$150. So something to be said for that. M Masters - -Marlin Fund kept about 50% in cash.
Institution don't see where the retails stops, but they knew actually where they are and take the opposite side. now I use emergency stop and if I have to take a loss I just do it maually.
Just my max loss per trade nothing fancy, it's automictically attached to every order, but I almost always stop myself out before that when I see the trade is failing. Scalping with a tight can be deadly.
How do you determine your max loss per trade. How does that influence your position size. I mean if your max loss per trade is a fixed dollar amount then where you place your stop will determine your position size. If your max loss per trade is a percentage price drop then position size will determine the dollar amount you lose. Can you give an example of a trade you have made or are considering and explain how you determine your emergency stop.