tight stop really work?

Discussion in 'Strategy Development' started by 0008, Oct 29, 2008.

  1. 0008


    I heard that many day traders (both futures and stocks) use very tight stops. Maybe 4 or 5 ticks at most. Is it really work? Would they often hit by market noises ?
  2. Depends on where and when you place them.
  3. 2 cents.

    You must combine your stops with your money management plan.
    How much are you willing to risk per trade (%). Does the volatility in your chosen instrument exceed that?

    Wiggle room.
    It's not your favorite dance club.

  4. Yes, they are taken out by noise the vast majority of the time. 98 percent of daytraders fail. Position trading is where the money is. Thank you for your time. :)
  5. You can minimize the market noise by choosing the right stocks and waiting patiently for the highest probability setups to trade. If you just enter any position in any high volume stock, then you'll be subject to a lot of noise and end up churning your account if your stops are tight.
  6. Only if your entry point is spot on. Stops are the easy part. Its the buy that is the tough one.
  7. And you've just registered today, yet you know everything about this site. What is this, your fifth alias?:p
  8. Amazing how consistent it is. You read an idiotic post that contributes nothing, and you glance up to check the idiot's username and date of registration.

    Sure enough, the fool has registered within the past month.

    Every time. Never fails.

    Straight to ignore.


    To the OP, if you're asking this question based on your experience lately, it's obviously a wild time with a lot of noise. I personally don't believe that successful ES traders can trade their usual style with a 3 tick stop. You have to adapt in these conditions. I don't daytrade every day (and never the ES) but I've been in front of the screens for the past few days, and I've been using wide stops with 1/2 my usual size. Also see the discussion about entering in two stages and trying to enter where others have their stop.

  9. Interesting thought.
    But what if a successful ES Trader is trading his usual style with a 3 tic stop in this market.

  10. If that's happening, then great, and the trader involved is very good. I assume that most of the guys who are able to do this are scalpers. Maybe one of them will chime in here and tell us that he hasn't altered his strat and that it's working out fine.

    My only point is that I assume some guys are adapting their stops and position sizing on extreme volatility/high noise days.
    #10     Dec 6, 2008