tight stop really work?

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

  1. Sorry ML, I don't work with examples that don't work.

    Risk.
    Talk to me only in terms of risk.
    I only understand risk.
    Nothing else matters to me but risk.

    regards
    f9
     
    #41     Dec 6, 2008
  2. CONR

    CONR

    That's a pretty tight stop on the YM these days. How many ticks do you typically go for profit wise?
     
    #42     Dec 6, 2008
  3. Thats what most seem to think... to me it's $75 (preferably less) per contract.

    When I do use specific targets, which is only 50% of the time, they are generally 25-50 YM ticks. Although, if the wind is blowing at exactly 16 mph and everything is alignment on my charts for an intraday- swing reversal a specific target may be several hundred ticks, with expectation to be filled same day.

    When there is no specific target, my stop is used to allow me to enter without need to pick an exact top/bottom (in context), and most important to prevent big loss. I adjust quickly to breakeven net followed by incremental profit levels when/if the trade works as expected. This technique, in my usage, tends to produce many small(ish) profitable trades, the downside if there is one, it leaves much on the table, usually generating another trade. Occasionally, the trade will turn into a home run despite stop adjusts.

    Osorico
     
    #43     Dec 6, 2008
  4. BSAM

    BSAM

    Good answer. Good answer. Besides, what if they are hit?

    The real question is: Do you have a plan to stay out or get back in?
     
    #44     Dec 6, 2008
  5. BSAM

    BSAM

    PFFFT.....You are assuming quite a lot, are you not?
     
    #45     Dec 6, 2008
  6. The biggest risk is letting your losses run and cutting your gains and worst entering a trade without a strategy.
    A predetermine loss robs you of letting your winners run and cause over trading. Stops at strategy failure may have larger losses than 3 ticks but your gains if using a sound strategy will easily cover for that and more.
    Now, if you are trading without a viable strategy that defines your entry and exit, then you should not be trading at all and that is your biggest risk right there! If you have an strategy then you should know at which point it has failed and 3 ticks is a random number that does not determine that.
     
    #46     Dec 6, 2008
  7. Well that is the name of the game.
    Stop out and re- enter is smarter than wider stops.
    But each punter will come to their own conclusions.

    regards
    f9
     
    #47     Dec 6, 2008
  8. Your statement is NOT true! You may be even less than 50% successful but still profitable. Your strategy should cut your losses short(otherwise it is a bad and losing strat) and letting your winners run!
     
    #48     Dec 6, 2008
  9. Best to drop this conversation.

    You seem to have covered everything in theory but left trading behind.
    It is only about risk.

    regards
    f9
     
    #49     Dec 6, 2008
  10. Lucrum

    Lucrum

    #50     Dec 6, 2008