That's an indication that your stop-losses are inadequately researched and too small, not an indication that you shouldn't use them.
Right Xela i just wanted to point out that stop loss how it is teached to retail traders is not the way to be profitable in today's markets. You have to be flexible, know how to use it in a proper manner function of your strategy and know when is better to manage your risk with size instead of a simple dollar stop loss or a "previous swing high or low" point.
May I ask: Are you a professional trading for an institution or a retail trader trading your own money? Regards,
Hi Ironchef. I'm a retail trader using my own funds, based in Sydney. I've never worked in the finance industry, but do have quite substantial experience as a private trader. It's an important context as I think institutional traders and private traders need to operate somewhat differently. Some of what you read posted around forums or as conventional wisdom in trading is more relevant to one than the other. I recently signed up to Elite Trader because of the quality of posters in the Options forum here. Our options market is quite limited and small compared to the US and difficult to trade but I'm trying to get more sophisticated in my use of these.
Thank you for your response. Welcome to ET, if you can ignore an occasional harassment, you will find most of the members helpful, insightful and friendly. I am a full time investor/trader trading my own funds but never worked in finance nor have a formal finance training. Regards,
That's absurd! - If you're trade is long OTM options for $20 total, then how will it blow your entire account?
Well, if you short OTM options naked for a living, like Karen, you better have a stop. So, it depends on your strategy and method. I have tight mental stops when I short options, less so for going long.
The OP posted about FUTURES and FOREX not options. My response in the sentence that you took out of context was with respect to SPOT FOREX. My very next sentence was “Your broker will forcibly close all your positions to protect themselves.” Perhaps that could be an indication that I was not discussing options (that was sarcasm). If you go to Vegas and put a bet on 22 Black your risk is limited to that wager, not your entire bankroll. I did not explain that situation, or options, since the OP never raised them. With SPOT FOREX, which is typically highly leveraged in North American retail (30:1 region) and far higher in other regions, your entire account is at risk on every trade. Some form of mitigation against that risk is the only sane way to trade. Thank-you for pointing out the need to expand my standard disclaimer on every post. I must clarify what instruments the post relates to, the no hurt feelings, and of course the go fuck yourself if you are such an idiot that you cannot understand context and you need to parse every word in an attempt to sound clever that only makes you look like a damn fool. Bit of a run on sentence that last one. = = = DISCLAIMER This post only relates to the following instruments: LEVERAGED SPOT FOREX I apologize in advance if this post has hurt your feelings. It is simply a brief review of my thoughts on the topic; based on what I actually do, not discuss in the abstract on the interwebs. I do not advocate it for anyone else, it is simply presented as an alternative view to having some jack-off stealing your money. You should in all probability do something else and completely ignore everything I have said. All other views are considered superior and no doubt the possessors of those alternate views have larger genitalia and should be proud of their natural endowments. For those with an absolutely fixed mindset that I am wrong. Congratulations, well done, you win. I try to keep a flexible thought process and if you have data and references to support your position I will look them over at some point. Please provide an exact reference rather telling me to do a search. Do not expect a reply or a rebuttal, since you are so clearly correct, you have no need to hear from me further. But just in case I will utter those words rarely seen on the internet,”Yes, you are right, your brilliant comment has caused me to change my mind.” After all, that is what you are really seeking, so there it is, I truly hope it has brought you joy and contentment. In case there are concerns that I am in a conflict of interest; I do not mentor, I do not want to mentor, I am not remotely qualified to mentor, I sell nothing regarding trading, I do not recommend any specific trade. In real life I am far too abrasive and short tempered to be a mentor. I have PTSD and there is a significant chance I would harm you. = = =