Stop Loss

Discussion in 'Journals' started by Spectre2007, Dec 25, 2007.

  1. One of the most critical aspects of trading is a stop loss.

    1) Entry
    2) Exit
    3) Stop Loss

    wanted to devote a journal to stop losses, in the various commodity markets and track which ones get hit.
  2. System 1:

    Cocoa -1952
    Mexican Peso - .091175
    Eurodollar 3 month - 95.89
    Eurodollar 3 month(pit) - 95.8410
    Coffee - 129.40
    Natural Gas - 8.438
    Live Cattle - 97.525
    Feeder Cattle - 105.450
    Lean Hogs - 61.850
    Soybeans - 991.25
    Wheat - 804.50
    Corn - 424.25

    System 2:

    Cocoa - 1908
    Eurodollar 3 month(pit) - 96.9620
    Canadian Dollar - 90.45
    Australian Dollar - 73.53
    Gold - 654.3
    Mexican Peso - .089425
    T-Notes - 107.1406
    British Pound - 180.90
    Eurodollar 3 month - 96.97
    T-Bond - 110.75
    Swiss Franc - 85.24
    Silver - 1380.6
    Sugar #11- 13.95
    Coffee - 131.30
    Natural Gas - 15.364
    Crude Light - 76.37
    Live Cattle - 99.950
    Heating Oil - 214.63
    Lean Hogs - 82.150
    Soybeans - 798.50
    Wheat - 563.50
  3. Copper 12/24

    stop loss - 300.90

    Canadian Dollar 12/24

    stop loss - 99.68
  4. a stop loss ideally is a point in a price scatter that has a low probability of falling in the distribution of price scatter after the entry.

    or has minimal chance of being hit.

    one way to reduce the chanes of getting hit within the days following trade entry is to have a greater degree of distance from the entry price.

    the smaller the distance the higher the chances of being hit.

    the disadvantage of a large stop loss, is eventually if a trend shift has occurred even a large stop loss will get hit.

    so how is a optimal stop loss generated, where the implied preceding price action minimizes yet achieves a balance between the large loss that would be registered from a trend shift.
  5. A proper stop loss should reflect the breach of a support or resistance line

    This optimizes your chances of profit and keeps you in the trade despite sharks trying to hit arbitrary stops thereby minimizing whipsaw

    And only gets you out only when absolutely required
  6. then it is implied.... trades should only be entered in markets that are near some sort of daily weekly monthly support or resistance. Everything else means price meandering will hit your stop loss.

  7. Yes you want to get in as close to the wall as possible... a back to the wall is good security
  8. the other point with optimal stop losses, you want price to be volatile in a given session, volatility implies price will move away from a zone, and continue to put distance from that zone upon entry.
  9. What do you think of multiple small stops equivalent to just one big one ?

    Little more costly in terms of commissions but each entry supported by a completely new premise of why you should enter a trade therefore increasing your chances of success.

  10. it works in 'gapping' markets, but small stop losses can be retested frequently since price is within the scatter zone during slow sessions.
    #10     Dec 26, 2007