Stops

Discussion in 'Index Futures' started by tortoise, Feb 24, 2006.

  1. I'm thinking, as of Monday morning, that I will no longer use them.

    Permit me to amend that. As of Monday morning, I will only place "catastrophic" stops 10 points from my entry, in the event I lose all contact with my broker, etc.

    Reason: After an analysis of the trades I have made on the ES over the past six months I have found, in nearly every stopped-out case, that my losing position would have been profitable, on a same-day basis, but for the fact that it had been taken out by a stop. On those rare occassions when I was simply flat-silly-on- the-wrong-side-of-everything, I would have exited that trade anyway, usually within a tick or two of the stop. Only in one case did the market move so quickly against me that the stop got me out at a better price than I would have reasonably gotten myself out of in the first place (in that case, a possible two points savings). But this "savings" was more than compensated for by the death-by-one-thousand cuts effect of small losses incurred by the use of stops.

    I mean, all kinds of stops. Tight stops (4 ticks). Loose stops (12 ticks). Trailing stops (that turn big winners into small winners). ATR-based stops. Stops strategically place around support/resistance. In short, any kind of stop that's bait for a stop run. In other words, any kind of stop.

    I realize that this flies in the face of everything I've been told and have read. So, clearly, I'm an idiot. But the facts don't lie and, after an examination of the facts, this is the only conclusion I can reach.

    Thoughts, anyone?
     
  2. The trouble isn't so much stops or no stops. It's more like the majority of index futures are a zero-sum game and a guaranteed loss for 95% of jokers who trade them. Why bother? Would you play some other kind of game where you knew the chances of you losing would be 95%? I doubt it.

    Find something else to trade where stops *can* be effective.

    Too many undercapitalized "traders" keep trying to milk the E-mini gambling machine and in most cases get their ass handed to them.
     
  3. Such as?
     
  4. Amateurs think it's some particular "system" that makes money. But it's really *what* you trade that will set you apart from the losers. Things are out there. They're hard to find. But people who trade good products aren't too crazy about publicizing it. Look at the ER2 in the last couple of years. It's become crap even as tons of newbies have flocked to it.

     
  5. Your response to my question suggests that you have drawn conclusions about me that are grounded in nothing but your own bias. I hope your engagement with the markets is characterized by greater discipline and rigor.
     
  6. your response suggests you take things personal quite easily... hope that doesn't impact your ability to trade... :))
     
  7. Does anyone have anything constructive to say on the subject at hand?
     
  8. How about this:
    Stops are mainly applicable to very trending instruments. Does the ES appear trendy to you? Most futures contracts are by their very nature NOT trending vehicles and chop you to death especially when stops (any kind of stops) are used. But even without stops chances are you'll leave with less dough than you started.

    How's that?

     
  9. The most experienced trader I know (and trust because I have seen his trading statements for many years) trades the first trade of the day on the ES in lots of 3.
    The first lot is exited with a close target, the second lot is exited by however he feels comfortable with that day (trail, target, whatever). The last contract he moves his stop to breakeven and does not touch it until just before the close.
    He says on the 3rd contract he gets stopped out of 4 out of 5 trades but the winners are massive as they generally pick up the trend days.
    Last
     
  10. cnms2

    cnms2

    I see that tortoise has posted only a handful of times, so you don't seem to continue an older argument with him. I can't understand why you decided to post on this tone. You replied dismissively without offering any advice.

    He has a problem with stop placing, and asked for advice on it.

    I understood that you know what to trade and what not to, but you don't want to share this knowledge. It's your right to do so, but if you don't have anything constructive to add please take your show elsewhere.
     
    #10     Feb 25, 2006