Stops

Discussion in 'Index Futures' started by profitseer, Jul 27, 2002.

  1. Spark

    Spark

    I agree with AllenZ. I had the same feeling as Allen mentioned in his post (item no. 2A and 2B). I will try that.

    I bought ES for 776 but got stopped out quickly even at that level. Later with that handcuff rally, it never looked back on that day when Dow made nearly 500 points. Putting tight stop has helped me being out of the mkt when i wanted to long ES when it was trading at 990. I kept tight stops until it fell to 772. I Don't know if it will be back to that level!
     
    #21     Jul 27, 2002
  2. Determining stop loss on how many points may not be the best strategies in the long run.
    After identify an entry point, I 'usually' determine my stop loss on the hi/lo of the previous 5 or 7 min. bar (more or less depending on how I think the market is trending or sideways).
    If I could not handle that x points of stop loss (e.g. the 2% rule), I sit on my hands, let it go....
    This means that I spend a lot of my time surfing porn on the other screen :D


    Cheers !!! :cool:
     
    #22     Jul 27, 2002

  3. You're right, sorry. Bad choice of words. I guess what I
    meant to say was:

    "Because I have to try to obtain at least a 3 to 1
    ratio on every trade to survive."


    and


    "When I say 3:1, I mean you try to make at least 3 dollars when you're right and lose about a dollar when
    you're wrong."




    I guess the point I'm trying to make to the guys who
    are just starting out is...Don't settle for a quick point
    or 2 when you're risking the same. Some of the best
    traders are only right half the time, and that's on a good
    day!

    If you want to survive in this business, try to make
    at least 3 points for every point you risk. I think
    most seasoned traders will agree with this.


    Thanks for pointing that out. The last thing I want
    to do is confuse anyone. That's what I like about
    this forum...you've got to be on your toes!









    :cool:
     
    #23     Jul 27, 2002
  4. ddefina

    ddefina

    I use stops similar to Dojibear--based on the recent H/L thats made. This method automatically adjusts your stops for volatility. On the ES, 2.25 points seems to be the minimum to avoid noise, but in the early mornings, and this last week, 3+ points seemed like the minimum.
     
    #24     Jul 28, 2002
  5. God#9

    God#9 Guest

    On the ES, I would try to keep stops as SMALL as possible. Then move your stop to breakeven as soon as possible, If you aren't scalping some. If you wait for momentum to dry up, you will get away with 1 pt and often less! I'd recommend for people new to the ES to use use no greater than 2 pts, and instead look for an entry where your stop won't get hit with 1-1.5 pts risk. If you miss it, who cares! Get the next one.

    AllenZ wrote a saying 'don't blame your stop on your entry'. I'd like to change it to 'don't blame your stop FOR your entry'. Good entry is VITAL in a market like the ES. If you have a bad entry, make sure your stop is IN (hard stop) at break even, if not get out, get out, get out. There will always be more opportunities.

    Another idea is to disregard your system/approach to hold on to a winner and instead cover to make up for previous stop outs. Most will not trade well after being stopped out.

    With 25 K I would not trade more than 2 contracts at a time. If I had a drawdown of 2 K I would trade 1 contract. You need to be a LOT more conservative if you have a small account. 2% is too much for someone new to the ES/SP, more like .5% And also use HARD STOPS, because mental stops don't work, DO NOT worry about the spread either .25 of a point, who cares?? MARKET ORDERS.

    It all depends on what time frame your trading, BUT in almost all cases a tighter stop will just save you from taking a bigger loss.

    As for risk/reward blah blah. That is rubbish, you can't predict what your going to take home for each trade. Truly good traders will have some way of taking what the market will give.
     
    #25     Jul 28, 2002
  6. If I think I can get a point, I'll put it on. If I do get a point, it depends on how it got there. If it got there on noise, I take it. If it was contested all the way and each new tick in my favor was firmly establised, I'll ride it. I won't hold overnight unless I can put in a 6 pt stop and still have something to show for myself in the morning.
     
    #26     Jul 28, 2002
  7. Spark

    Spark

    On an intraday basis, is it safe to buy or short when ES has hit -+ 20 points? My daily ovservations over the last month suggest it may be safe, except on the day when SP500 rose above 40 points. I started ES just last month, but would like to get some experience from seasoned traders....
     
    #27     Jul 28, 2002
  8. breakout, No lie! Yes that helps. After a long drawdown, it's easy to be tempted to take a small profit which is out of line with your normal r to r. But then you start looking down the line the kind of big profits you need to make up for it and the whole thing gets kind of ridiculous.
    5 ticks is a pretty tight stop. But 15 ticks is a realistic profit objective. And so it goes. 5 handles is a nice comfortable stop, but a 15 handle profit takes a little hope.
    But yes, point well taken. These small profits (less than 1:3) are eating me alive.
     
    #28     Jul 30, 2002

  9. Here's a link to Dr. Tharps website. Download the demo version
    of his money management game. I think it will show you the
    importance of the occasional 3-1 and 5-1 trade.

    Hope this helps

    www.iitm.com
     
    #29     Jul 30, 2002
  10. josbarr

    josbarr

    Pivots are a great way to pick your spots and place stops.

    We still mail them out free by email

    jbarry@proedgeonline.com
     
    #30     Jul 30, 2002