Stop loss tampering

Onra · Apr 19, 2020

Mark Cuban said:
Titan how many times are your stop losses getting falsely triggered? Now out of all the times they are falsely triggered how much worse, (or better) do you think not having a stop loss would be? Would 1 big loss be worth the 15 false stop loss triggers? Is there another way you can be alerted when a price is hit? These are things you have to think about if you are going to be a professional trader. Think outside the box and look at the big picture. There is money to be made and the markets are trying to make you fail, what are you going to do about it?

I hope this helps, and remember, stay safe. I was in your shoes 30 years ago, and if you keep trying you eventually will succeed.
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Intriguing...
are you suggesting that's it better to blow up a (small) account than to die of a thousand cuts...?!

Titan_Securities · Apr 19, 2020

volpri said:
My SL gets adjusted on any trade if that trade is an averaged down trade and sometimes on trades that aren’t averaged down. I enter on an initial “hard SL” that appears at the time to be a logical place to place a PA SL. However, as the trade unfolds the dynamics of that unfolding can alter my SL. If price dynamics is slow and grinding I may tighten the “hard” SL. If volatility picks up I may widen it. If a PA pattern forms that wasn’t there when I first placed my trade that too can alter my “hard SL. So, I have an initial SL based on my best guess as to where a logical place to place it ought to be and that decision is founded upon the PA, at the time of entry. But since I cannot know “how” the trade will dynamically unfold depending on the dynamics I may or may not adjust that SL. If I average down it will most likely get adjusted. Finally, I have mental a SL point (that I eventually maje “hard” if price moves alot against me where I scrap the trade entirely and go the other way. Usually doubled or tripled up in the other direction. My original premise is wrong and I just get out. I suppose I could just use the last SL and make it a “hard one” i.e. the point where I would double or triple up I suppose, but I just prefer doing it the way I do it. I prefer being taken out on a “Hard” dynamic SL (one based upon the dynamics as the trade unfolds after entry) than executing a mental catastrophic SL or ”premise wrong” SL in the event of a sudden spike up or down that some algo generated. In others words, I am kinda protecting myself a larger mental SL from some algo that suddenly spikes thru my dynamic SL and my trade premise is proven wrong before I can adjust my “hard SL” to my mental SL on the DOM. In such a case I would be taken out on the dynamic hard SL and suffer a lessor loss.

In summary my initial hard SL gets adjusted to a dynamic hard SL (sometimes it stays the same) and then I have a mental SL point where my hard SL will finally get adjusted to, if necessary, and that won’t change. It maybe a screwed up way of looking at SL’s but it seems to work for me. And it keeps me in a trade until it can work in my favor.
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Some good stuff here. You have layers of protection throughout.

Titan_Securities · Apr 19, 2020

Onra said:
Intriguing...
are you suggesting that's it better to blow up a (small) account than to die of a thousand cuts...?!
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Would really love to know the answer to this. This is suicide. Its like dying and dying a thousand times. 1000 ways to die in the markets

Mark Cuban · Apr 19, 2020

Onra said:
Intriguing...
are you suggesting that's it better to blow up a (small) account than to die of a thousand cuts...?!
More...

I did not say that. What I was suggesting is if you can observe your trades in another way, besides using a stop loss, that will alert you when a certain price is hit so that you can make your own decision. I fully agree with stop losses, when they are used the right way. And most exchanges now know where everyones stop loss is at, and they make their money off of fees when a stop loss is triggered. You can tell where I am going with this story... The bottom line is, use your own judgment and protect your earnings with the best means possible. To me, a stop loss should only be used when there is no way for you to monitor your investment. Hope this helps, god bless

tomorton · Apr 22, 2020

The stop-losses I'm using right now in forex intra-day trades don't get hit by spiked quotes, its usually only if price is really really going that way, in which case I do want to be out. The SL will typically be about 1 x ATR20 on the M30 chart from entry. Hard to see a broker moving their quotes so far just to hit some stops.

As it happens, yesterday I was stopped out by a counter-trend price move but I just simply took the opportunity to re-enter in the same direction when price reverted back to the trend - made back more than 6x what the stop took away.

Coner1980 · Apr 26, 2020

There are three times of the day when your stops are most at risk of being shaken out:

Just after the open — in the first half-hour;

Between 12:00 midday and 1:00 p.m. when the morning rush is over; and

In the 15 minutes before the market closes.

schizo · Apr 26, 2020

Titan_Securities said:
My main concern is stop loss tampering. Stops are used first and foremost for protection and invalidation levels. Most retail traders fail because of stop loss tampering. Why not leave your stops where the trade is actually invalidated. If the trade is to take you out let it do. Have a level that says if a trade crosses that level then you can be rest assured that its going to go to your stop. Then there you can cut your losses early before a full stop out. Eg. The famous SFP simple and logical area for stops is maybe 5 pips above the high and a close above the high if it's bearish then close the trade coz its actually invalidated. The issue is a trade moves 15 pips in profits and immediately you move your stop to break even. Why do that? How many times do you see it come back and move another 15 pips in loss then turn and goes 200 pips in profits. From there we chase the trade using max leverage. Sad

Let me know your opinions. To leave the stop or move it (tampering).
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You make a valid point. But sometimes, even though it goes up 15 pips and then comes back down to BE, it doesn't always reverse back up. Sometimes it tanks hard and now you're REALLY chasing it. By the time the damage is done, you've given back entire month's profit.

Bottom line: Why take chances? Get out when you can, not when you have to. You can always re-enter the trade later.