Literally, no, but contextually I think so. I agree a perfect stop doesn't exist. A stop on ATR is alright. I've used them plenty trading futures (though I prefer literally standard deviation). Considering the context - a measure of volatility has changed dramatically so you widen out your stops. If they get hit something crazy is going on. Fixed stops are bad but these flexible stops present useful context in the presence of a change in market regime. If your idea is long, and volatility increase and it blows down short, your idea has been invalidated and the stop is simply acting as a method to remove yourself from a market you no longer understand. I try to look at a stop loss as your personal risk management team. If you blow your risk limits you are pulled from the market. It is certainly useful to have some kind of stop. What kind? Depends on what you want. Your idea of exiting on the news is good because that will likely lead the rapid change in ATR as the market adjusts.
OMG!!! You wouldn't even know how many times I've given back all my profits and then some because of undisciplined qua bad exit strategy. Yes, entry is extremely important, but exit is just as crucial. Otherwise, like I already said, you'll just give it all away. On that note, I would like to add that the exit is just the OPPOSITE of the entry. If entry is considered as LONG, then exit is SHORT. So where you get out is where you should get in if you were to go short. I'm trying to make this as purposefully vague as I can . Hope you understand.
Stocks get added enthusiasm when rising, and added 'closing of purse strings' when falling. I maintain, much of the reason for a falling stock is not due to selling pressure as such, it's more a case of buyers showing no interest, you can see that with volume drying up. So in effect, bag holders go down with the ship. But the point I wish to make, once the trend tips over into falling mode, especially like this time of year, kiss your profits goodbye. Without some sort of stop a trader is taken downstream and washed out to sea. The plan to make money is awash.
Imo, going short on an long exit as a matter of course (always in a trade) is not a good idea. An exit signal should not be seen as a reverse signal.
I agree with this. The only exception is if your entries have very high probabilities, but these are very hard to find.
No stop is perfect, won't argue with that, but some are better than others. Why live in a ghetto when you can live in a mansion - even the mansion has its own issues.
This is as certain as it gets when it comes to gambling in markets. Just want to add, don’t bother defining weakness. Just buy when the spare cash is there. It’s basically a momentum index created for you. In an earlier life I attempted to manage my own long-term portfolio adjusting for volatility, but eventually realized I was barely beating the benchmark, and many months just fell behind. Attempting to predict the volatility, and adjusting position size for it just didn’t work in the long run. Outside of my short-term trading accounts, and personal home, all my spare cash goes to commercial REIT and large cap Tech portfolios.
A good system. Rather. To you it’s a stop. To the market it’s just a buy or sell. This comes back to the point that an edge is hard to find. With the stop being part of it.
This makes me wonder. Instead of an exit. If atr multiple is used as an entry on the other side what would be the expectancy. Gotta be pretty bad I am guessing? Wouldn’t trust the hedge guys them most can’t beat the index