It's a stop that can survive normal price movement within a range that doesn't invalidate the reason for the trade. For example, if I see a long setup in an uptrend, I would likely place my stop loss below the previous support level in my trading time frame (such as the last higher low, the 20EMA, the lower trend line, whatever makes sense at the time). If the maximum loss I'm willing to accept on the trade is .20 and the previous support level is beyond that stop level, I risk getting shaken out of a perfectly good trade with a loss.
As others have already mentioned, utilize higher timeframes to see through all the chop. Also, what's the purpose of your CCI 14? How are you using it? I see that you went long into a potential triple top when the CCI was close to 0. I'm not saying that's the wrong move, as I don't know your strategies (and NoDoji pointed out a valid reason for going long), but what's your thinking there?
that only says you did not master trading yet. a good trader knows why he enters, when to enter, the most important: accurately assess the market conditions (trending or random). use a stop loss to trade is suicide. yes, you need a loss cutting plan, but you need cut loss intelligently. first you need understand under what situations your idea is wrong, that is not a mechanic answer. I bought NOK call 3.5 at 0.35, then it dropped to 0.24. dropped 33%, I added more. I know the drop is daytrading activity, who cares, buch of non-sense noises.I know after a thrust bar, several random bars are very common, then next thrust. my daily chart nicely says it will print 4.2+. it does today, so I am out. like last week, my put in appl wipsawed hardly, temp% loss 60~70%. I just ignore it until I finally claim my victory in the expiration day. I beilieve it will hit 500, then bounce. I do not belive in those little 5 points spike or drop, they do not define trend. stop loss is for those lazy ones. market idea is not mechnical, you can not simply use a thrashold to define the idea. only in technical breakout trades, can be used to enter. exit often need be intelligent judgement. but not mechincal thrshold. I do not use stop loss to cut loss, I am successful.
I don't use the CCI at all. It's just on my chart because I was experimenting with it. I watch the price so closely I couldn't even have told you for sure that CCI was on my chart. I get tunnel vision. I did notice that when trading CL if the CCI hits +200 or -200 it usually has at least a minor pullback. I think CornixForex used at one time as a divergence indicator.
I've read some of your posts before. I think you have some good common sense when it comes to trading. I think stops are stupid also, but I don't know how to daytrade futures without them. It's funny................I'll click thru a chart with my girlfriend just for fun & we'll go thru a day to see who makes the most ticks. She has absolutely no idea about trading, but she's beat me every single time we've done it. Really pisses me off, but I keep that to myself. When something goes against her she just keeps it until it goes back in her favor & then gets out with a profit. Goes back in her favor sooner or later every damn time. If I try the same thing I happen to pick the one time that price has a monster run against my entry & I get killed. I tell her that would never work in real trading.........she'd get wiped out. But I'm not so sure. Like I said she's beat me every single time, probably 10 times now. Even if she had a run against her she's made so much the other days that she'd be ok.
No disrespect but lot of nonsense in this last post. Without stops and with this style of trading you cant exploit daytrading's best advantage, which is small fixed risk and insane leverage.
fact one: stop loss does not protect overnight position. fact two: stop loss does not protect HALTING position. fact three: stop loss can not define a trading idea. through a thrashold to define the market "wrong""right" is too ideal, market is not clear-crispy black and white. typical bottomming out is double bottom, the double bottom has various types (slight different). or a peaking, some are railroad, some are MCAD divergence head/shoulder. bascially buy low and sell high is just common sense. last year, BAC/C/FSLR are year2011 top losers, but look again, this year's top gainers. look at AAPL, this year's top loser. fact four: stop loss is wall street's scam, including high leverage and day trading. they suggested it and ad it as possible as they can. brokage firm loves it, when you are stopped out, they get commisions. the more you stopped out, the more they get. stop loss put you into a suckers' mental status. you become an active loser: you declare yourself a loser, while you should be a fighter. that is why I do not use leverage, I just long either call or put options. my brokage firm has no control of me at all. fact five: those profitable professionals acutally do not use stop loss. Martin schwartz did not. even he averaged down trading. Willian o'Neil wrote in books "how to short sell to make money in the stock market", he did not blieve in stop loss and stop loss is not a wise way to cut loss. warren buffet did not apply stop loss either. ... suckers love to apply stop loss. I donot use stop loss. I once tried. the reults are horrible. I once day traded futures, my aim is to make my trading more systemtaclly (standariz), but I found it is fruitless. i realized my fast in and fast out, buy dip and sell pop strategy works nicely. I even know suckers' stop loss. if I noticed sudden thrust bar either up or down, I often faded, most time those unfortunte suckers paid high price wash out at those "stop loss" gun down bar. do not trade for the sake of trading. trade for profit.
I'm sure there are good traders who use stop losses, & I'm sure there are good traders that do not use stop losses. Both ways work. It all depends on your rules, your plan, how leveraged you are, what market you're trading, etc, etc, etc. If you have a million dollars & you are trading 1 contract of something like an oil contract you do not need a stop loss as long as you are following your plan. It could have one of it's worst days ever, and it still wouldn't be a big deal. It all depends. Anything can work in this game.
no kidding, I trade without stops, but I pay for it dearly by trading smaller than anybody else with my account size would. You can't get anything without giving up something else. I made the best biggest money just putting it on with a stop. The swings were more than I was comfortable with. After all, I can only lose 100% one more time. So I had to give up something to get something. So I gave up the big positions with the stops (which if I didn't go broke would have made me the most ROI) in exchange for trading smaller with no stops. But getting back to that whipsaw, it isn't just about money, it can really do some psycho damage. All good traders protect themselves from excessive financial damage, but like the man said, you have to give up something to get something, and I am not opposed to giving up something to protect yourself from whipsaw, due to the fact that it is so psychologically damaging.