a stop loss order isnt the most important lesson here imho. the most important lesson is never make any one trade that could take you out. stops are not foolproof.
Even after 10 years....and longer...you'll probably still make the same mistakes you did as a rook. But...more than likely you'll recognize them faster....and change quicker. Old Doc Z.
Once you eliminate stops as a safety net what do you consider the maximum risk exposure of say, 1 NQ contract? Its not going to zero so I assume all would agree its less than $20 x NDX but what is a reasonable worst case scenario to assume?
i didnt say to eliminate stops. even with stops you shouldnt make that leveraged trade that if an event happens you are gone.
Right, I understand and I'm not disagreeing with you or trying to be sarcastic (I hope it didnt come across that way). As you said, stops aren't foolproof, so what is a realistic worst-case scenario that one should use to make sure that they don't blow out their account for different trading vehicles like stops, futures, etc.
Ok, now we are getting good dialouge. Which, this dialouge could be the most important that anyone could ever read. 1) Dont trade more than you can afford to lose; 2) Good risk management; 3) Don't double down; 4) Dont fall in love with a position; 5) Remember: Anything can happen even to the best of traders!!!
I worked at a place with a former Ibank trader who made 20-30k a day trading 1000 lots in the bond futures. He did well for about a year, then averaged into a losing position, eventually ending up long about10,000 lots during a one-way trend. He held overnight and had dropped about 10 million Euros by the time he was forcibly sold out on the open the next morning. He went bust owing millions, the firm was bankrupted, and the general clearer took a 7 figure hit as well. As someone who had just started trading one lots and sat a few places away from him, this was a rather interesting experience.
Hey my dear friend. If the toilet story is related to me then you are wrong. I put a stop loss order, but the stock was suspended and opend 5$ under the price I went long. So, there was nothing to save with stop loss orders. But it doesn`t matter. You see, I am still alive Good Luck Trading