stop loss determination

Discussion in 'Strategy Development' started by Buy1Sell2, Jan 26, 2006.

  1. Buy1Sell2


    How many at ET set their stop loss according to the charts/market and how many set it according to their account balance? What is your particular preference?
  2. Either is logical. Both are arbitrary.
    Sergio77 likes this.
  3. For swing trading, I use a combination of the two thanks to position sizing. In other words, I pay attention to both. As I do not want to lose more than 1% of my account per trade. if the stop based on the market implies a big move, I reduce my exposure/size and vice versa.
  4. Buy1Sell2


    Do you skip trades then that aren't within budget and if so, is that a difficult decision especially when you feel strongly about the potential?
  5. No, I would just have a small position. I understand it is a conservative approach, but it enables you to preserve your capital. Less risk, less reward. But this is the best way to trade for me, mentally. I hate big losses. I do not like small losses but they do not deplete mt account too much.
  6. Buy1Sell2


    Yes I agree , a smaller position keeps you in the game. I think the losses are what need to be managed and the winners take care of themselves (for the most part)
  7. Buy1Sell2


    Are there any traders on ET who don't use stops? If so, what is your rationale?
  8. monee


    Not using stops may make you money on many trades but eventually will be a disaster.

    Stop loss I use is based on the charts.

    I know that 1.5% is the max % of my account I am willing to risk on a trade.

    If I can get outside the noise with that stop I take the trade.

    If I can't I'll wait for a better entry or pass on the trade.

    The extremely difficult thing for me is how the exit.

    I came in this morning long ER and ended up selling at 722 around 10:00 (3.6 pts below the highest bid)

    Exits are tough.

    Maybe wait till 9:40 and if ES breaks 9:30 LOD sell or just sell based on a % of 9:30 gap gets filled sell.

    Would love to be able to hold a few days what seems like a good entry but I can't stomach this much of a pullback.

    Well SPX up 4 pts Dow up 50 and ES making new lows
    Well I'm done for today don't want to give back any of my gains.
  9. Buy1Sell2


    When you say "outside the noise" , what exactly does that mean. Let's say if you were looking to short--
  10. monee


    putting a stop in an area that price has not trade at.
    #10     Jan 26, 2006