Trading with a Stop Loss in the Futures Market is for Losers

Discussion in 'Risk Management' started by emg, Jun 20, 2011.

  1. emg


    Those (SMALL TRADERS) that trade with stop in the futures/commodity market are doomed to fail. I am 99.99% sure, u will lose indefinitely.

    Think about it small traders, what is the main reason for the loss or blowing your account? Your stop orders.

    Of course, small traders need to place stop due to small RISK capital in the account ($5K. $20K, $50K). Small Traders are taught by 3rd party educational and system vendors to place stop to manage risk and yet they represent more than 90% of small trader lose!! They just lose!!

    Force trading, overleverage (trading with more cars) with less capital in the account would make sense to place stop and are doomed. 99.99% u will get stopped out.

    Adding to average down is risky if one knows how to do it. Most SMALL TRADERS add to average down/up by every tick or point are doomed to fail and will blow their tiny account ($5K, $10K, $20K, 50K) in no time. THEY WILL FAIL!


    with $100K minimum in the account and begin to trade 1 car and average down/up 15-50pts against u will minimize risk. For example:

    short 1325.00 emini sp 500 on 1 car.

    es went against you 20pts. your drawdown is $1000 on $100K account. Is that a lot of heat? U are down only 1% of your account. Is that a lot of heat?

    U will go ahead and add and your average price will be 3pts away from the market price. From there u take small profit or loss.

    $100K account is equal to $5000 minimum standard to open a futures account and begin trading with 1 car

    those that do not have that kind of money should either join the house or should not be trading futures market at all

    According to the CFTC:

    Commodity Futures Trading Commission Futures and Options trading has large potential rewards, but also large potential risk. You must be aware of the risks and be willing to accept them in order to invest in the futures and options markets.

    The risk of loss in trading commodities can be substantial. You should therefore carefully consider whether such trading is suitable for you in light of your financial condition.

    Remember SMALL TRADERS:

    More than 90% of small traders lose. They just lose!!!!

    I am looking for the best answers Bring them up!
  2. emg


    Also, those (SMALL TRADERS) that place stop need to because they cannot managed risk. That is a FAILURE TRADER.


    Trading is all about mind game.
  3. tit_head


    Hey emg, How many contracts do you trade?
  4. jokepie


    I agree with you. Short term trends in future have a very bad R:R plus has incredible noise/chop times. Most traders cannot SIT ON THEIR HANDS during these periods.

    Said that - I believe Futurs trading is not for small trader with even 30K in the a/c. its just not.

    Trading with stops will delay the stops will give these a/c margin calls almost every day.

    PS: I don't like that you always post ur QUOTE in all threads. But I am sure you don't care and neither should anyone else. :D

    happy hunting.
  5. tit_head


    Whats wrong with re entering? Why sit there and watch your pnl get worse? So risking 1% of 100k is different from risking 1% of 10k?
  6. LOL, if your stops keep getting hit your not trading the right spots. You dont understand market profile and noisy area's.

    Rookies who think they know everything dont use stops, and usually get blown out within the first month of trading.

    Continue to not use stops, sir. Thanks for my afternoon laugh.
    K-Pia likes this.
  7. This thread screams novice. If you need to average up or down because your analysis of the market is sub-par maybe you should find a different hobby.

    This isn't a casino. Stops are there for a reason, and like everything else...SHOULD BE USED CORRECTLY.

    Instead of worrying about the stop, maybe you should worry about the idiot on the other end of the "buy" button
  8. Lucias


    EMG, I've written much to the effect that stops hurt performance. However, I think stops can be used skillfully. I'll typically set a catastrophic stop and then exit before my stop is hit. I do not recommend averaging down. However, it can probably work on range days or if one is willing to hold a few days to recover. Averaging down intraday though with an intention to close at the end-of-day is a terrible strategy except on range days. One problem with averaging down is that it often will have a high opportunity cost, and make it more difficult to exit a losing trade. The time you are averaging down then you could be making profits.

    I do not at all agree with your capital recommendation. For a beginner, I recommend 25k per contract and reducing that all the way down to $5,000 to $7,000 is very reasonable when one develops expertise. One can even go higher in leverage provided the holding time is short. But, most systems will struggle using leverage beyond 7k-15k per contract.

    Most short term edges in the market are rather small which is a major reason leverage is required. Also, with a 5k-15k account, it is difficult to imagine meaningful returns without leverage.

    I agree in principle with the problems you identify but not with your solutions. My solution has been to develop skills requires to manage the risk. One can, also, look at using other instruments, i.e options or spreads in the right instances.

    K-Pia likes this.
  9. oh shit, emg and jack hershey in one thread
  10. jokepie


    Futures are not IDEAL for day trading done BY SMALL ACCOUNTS>
    #10     Jun 20, 2011