To stop loss or not

Discussion in 'Options' started by qlai, Dec 26, 2020.

  1. Overnight

    Overnight

    That's an unfair way to think of it.

    Did you ever think that after your "decades" of study, you now receive market intuition from/through the osmosis of those long years of studies?

    Like muscle memory on chart reading or something?
     
    #31     Dec 27, 2020
  2. padutrader

    padutrader

    you have a point

    but i think i may save someone else the trouble of going on the wrong road for a long time
     
    #32     Dec 27, 2020
  3. Overnight

    Overnight

    Some people may have to travel a long road to get to the destination. But to tell everyone to not take the journey, even if it is a short one, through study and research, is bad "advice".

    You studied for decades, and found out that you no longer have to study.

    That's like telling a novice pilot that because you were a great seat-of-the-pants pilot after decades of flying, they could be one also after just one hour in the cockpit.

    Until the plane crashes into the mountain. They have to be made privy of the new shit! Man!
     
    #33     Dec 27, 2020
    zghorner and comagnum like this.
  4. Options on SPY QQQ (any liquid, tight options) should have stop-limit orders.
     
    #34     Dec 27, 2020

  5. Could you give an example of such a position?

    How would the stop work during the after-hours and pre-market?
     
    #35     Dec 28, 2020
  6. padutrader

    padutrader

    no i have given aa simple non subjective method which anyone can verify by study of charts in a few hours

    that is a gift
     
    #36     Dec 28, 2020
  7. I assumed to daytrade only but there is no options trading overnight only 15 minutes before and after the market closed, SPY trades but the options do not, thus I would likely get out before the close. Still, I like to have positions with brackets on options and just walk away. There is something destructive staring at the screen that makes me do stupid things. Come back before the close to see how I made out.
     
    #37     Dec 28, 2020
  8. Just remembered something I've seen extensively in backtests and live trading with respect to stop losses. Especially live trading :) You buy some stock or ETF which "cannot fail" and it starts losing value. It drops 5%, 10%, 15% ... nerves get tense and it reaches 25% down from the point where you originally bought them. It's all Murphy's law for stocks from this point on and it goes like this:

    1) If your nerves break and you sell the stock, with 100% probability it will bounce back to where you originally bought it and even climb some more. Starting next day with one large jump up. But not if you purchase it again, then it will drop down again below previous day's level, goto #2.

    2) If you hold steady and go Warren Buffet on the stock and keep it forever, it will continue to tank to 50% and lower, as long as you cling to it. The moment you sell it however, goto #1.
     
    #38     Jan 2, 2021
  9. Bomp

    Bomp

    If i have witnessed it one time I have witnessed it 1000 times. Undisciplined traders stopping at the lows(if long). Average in, average in , average in.....insomnia..stop.. full reversal.
     
    #39     Jan 2, 2021
  10. caroy

    caroy

    I enjoy these studies. Curious about a more dynamic risk management approach of rolling up or down the untested side at 21 DTE or when one side is breached and what this does to the long term profitability of the 16 delta strangle.
     
    #40     Jan 2, 2021