I think it is a bit extreme to say stops are for loosers,,, there should be a strategy for each situation,,, for instance,, I have a system that doesnot require stops (wiew sample in www.colective2.com/go/catordow) also I have another system that works with stops, but, they are proffit taking stops and those may kick me in and out in a trend, most times making me less money at the end of the trend than if I had stayed in it full time,,, How do I know whats going to happen,, at least the few pips I get each time are there,, in my account. I trade futures and cash,,, up and down,,, my system allows me to be in the market full time if I wanted to,, all my work is choose the right timeframe at the right time and follow signals,,,, the stoploss becomes normally after a couple of dingdongs too close in time,, then I know Im in a trading zone,,, which means I must STOP the trading,,, analize the situation,, change timeframe to a tradeable one and off I go again. I consider stoploss in essential for anyone that does high frecuency trading with an all in one strategy,,, entry,exit and stop,, (bracket orders) used with different settings according to the ability and the wealth of the trader; I rather lose very little a few times and try again for the good go.... calm before the storm.. the good trade is there for you to catch it.. and youll want to put in more contracts next time,,,, if you lose 2 or 3k, you will want to rethink about your strategy. If someone uses indicators to get buy/sell signals,, then the stops should really be to reverse the position or to take part of the profits the same as with other signals to put in more contracts. Propper stop levels are really difficult to decide and only having worked out a good strategy you can put your stops in a manner that you will not be kick out unnecessarily and what is worse, losing money. all the best Rafael (spain)
Why don't Chewbacca just tell us what his percentage gain so far if he does not use stop losses "at all"? Then we can see it is for losers or not?
Let's see, Chewbaca does not use stops. Who does use a stop? Linda Raschke Lewis Borsellino Tom Basso Tom Baldwin Pauld Tudor Jones Ed Seykota Marcel Link John Carter Hubert Senters Jea Yu Mark Fisher Mark Douglas Oh yes we do too. I wanna be like chewbaca and not those other losers. Alex L. Wasilewski Co-Founder & Head Trader Trades That Work www.puretick.com 1-877-GOLONG1 (1-877-465-6641)
Look at this fool subliminally placing himself in that list. Yes, Puretick uses stops, ridiculous large stops that get taken too. Lose the attitude, you got no business telling others what to do or not do in trading. Fool. Susana
The average EA trigger stop is about 23 YM pts of 2 ES. What type of stops are you using Susan? You'll find out sooner or later that having a 5 tick YM or .5 PT ES stop will be hit 90% of the time and your target 10% of the time. This is because the market wiggles when it moves. It doesnt simply go one way or another. Try it out on a sim account if you don't believe me. Geoff
I never actually read the first post chewbacca. Got caught up with watching all the arguments. I had a friend who blew out his account last week by accidently not using a stop loss. Those guys in some of those huge tech stocks that fell or even Enron are sure glad they used a stop loss. I think using one too tight is disasterous and a waste of your money but a 'enough is enough' point is what I'm looking for. Sometimes I'm in the PT trading room and I hear people complaining the 2 TICK ES stops are 'too much' I know where there account is headed. BK
No, but he does have a point at which he accepts his position was wrong. Then, instead of just selling at the market (into what may be a short-term dip low), he assesses conditions and tries to find the best place to exit. E.g. lets say he buys bonds after they fell from 29/32 to 21/32. He figures they shouldn't go below 18/32. But the market swoons again and is down to 15/32. Rather than sell the lows, he'd wait for the capitulation to end, then probably look to exit at 19s or 20s. Effectively he still has a stop loss, it is just a more flexible one with some discretion in most cases.
Baldwin is a silly example - first of all, he's obviously not going to place a hard stop in a traditional sense with a retail broker when he's one of the largest traders in the pit to begin with. And back in his days, you couldn't release a 100 lot without incurring slippage just because the bonds traded at some arbitrary price, so it would destroy his tiny edge in scalping/flow trading. I daytraded ES among other markets for years without hard stops (unless I left my desk), and it was a mistake - not a huge mistake unless you tilt and martingale losers, but a mistake nonetheless. The premise is that you can watch the activity and discern a bullshit stop spike from a real move. You can't unless you trade in hindsight. Ever get long 1% of the float of some thin POS stock with 3 market makers and a two buck wide 100-up spread? I have - it sucks; if it's going to zero, it's going with you. The biggest advantage we have as retail traders is being small enough to buy and sell at will with practically no slippage - use it.
Hi I thought I would just give my 2c on this while SPM8 makes its mind up. Hard stop losses are a con as far as i am concerned . they dont do what it says on the tin, they dont stop loss. Maybe they will contain it or conversely get u out at a worse price than u could manage yourself. Logically s/l oders should always b stop reverse as placing a hard stop at a certain price implies that u think the move has more to play, if a s/r isnt justified then it means that the stop is being placed at the end of what the trader perceives as near the termination of that move. Noise, random spikes and other traders looking 4u all mitigate aginst using these misnamed MKT orders, as somebody said only good in the event of death at the screen. still 1400
your 'friend' isn't a pro trader pro traders don't blow up he was probably: (1) undiversified, (2) overleveraged, and (3) fighting the trend.......that's the ONLY WAY TO BLOW UP