it is the very interesting threads i am scare of the es, stop me too much what if not use stop at all, in YM June 09 contract give good results, if you make good profit target, and the time horizons on YM - 10-day holding period max, the profit target 50 point fix, fix entry at minute #200 of trading session, 1 trade in day, no stops give very good equity curve sorry about Enlish Varima
Look into the concept of "Maximum Adverse Excursion" by John Sweeney. It help you determine an optimum stop loss for your system by separately analyzing winners and losers. http://capitalistattitude.com/http;.../how-to-use-maximum-adverse-excursion-example
Why do I get an impression that you are drunk? A typical drunkard: "eh, what did your title say? say it again, because I didn't catch it." In this case, the title was written. You can't miss it.
Being that you are asking about stop loss of one point tells me you don't have a clue about trading this market. Therefore you will wipe out your account, for YOU, there is no Pros and Cons. I am not trying to insult you by my response. I started day trading S&P's in the 1980's, one tic was a nickel and it was $25, a full point was $500, most normal range days was 3-5 points. I would have to call my broker who would call down to the floor to place my trade. Back then, unless one traded a volatility method, most used stop loss of a half a point or less. Because of the high commissions of today, extremely difficult to build a 2 tic SL method for today's trading. I say high commission of today, my cost back then was $20 rt, today I have to trade a ten lot to control same amount of $500, so even a $3.75 rt is much more costly than days of old. MAE's have been explained well here, but they are derived from having a 'thought" of your type of a method to trade. Then applying money management rules, and of course backtesting it over the course of several years of tic data. By looking at the 3000 plus sample size, you can attain how much of a Protective stop to use using MAE. I concentrate on methods that have the smallest losing % within reason. Using a one point stop also generates many breakeven trades, which if you don't make one tic, is a losing trade. (commish) I believe the amount of stop loss though starts with the entry, the tighter the "SL," the more perfect one needs to be for entry. Experience comes into play as well. Unless you are well skilled at support and resistance, one point will be too little. And breakout methods using one point stop generally don't work cause of all the false breakouts. Can one point stops be used successfully, you betcha. Although I believe my entry is very very good, where the money is, how to manage the trade once you are in. When I was a newbie, I tried to generate many more entries than money management rules, today I have one way of entry and some 30 plus money management rules. And if you entry is very good, you can do what almost everyone says not to, add contracts as price goes against you, now each tic better of entry, I use one tic less for Stop Loss, so on occasion, last entry actually has a one tic stop loss. But this is achieved by your backtesting. Unless you backtest this approach, adding to losing position is foolhardy. I must say, there were some very good informative posts on this subject. Handle
the normal stop loss for es is 2/3 points... but you want only 1point the pros: 1. your loss limited to 1 point 2. you account will have a slow death. the cons: 1. your entry must be in market direction 2. your entry must be in trend days with strong momntum 3. you need to know when market is in strong momentum 4. you need to target your exit higher than 1 points 5. your trading platform must be fast and suitable for scalpers like you.
do scalper need a positive RR ratio like 2:1 or can it be inverse like 1:2. I know in theory either way can work, but I just wondered what experience people had and which yielded them the best results over time.
It's hard for most traders to use a 1 pt stop... I use a max 1.25 point stop on the ES. This is only possible if you have a defined entry strategy with price action and entry patterns. It's helpful to have a smaller entry chart (I use the 233 tick) and a larger chart to actually take your trades off of... Make sure you're average winner and win/loss ratio make sense to have a smaller stop. It's all about the RATIOS!
If you had thought and traded the right way, you would have become Steve Cohen. Cohen started trading in the 1980s. What went wrong?