Unbelievable ! My stops get hit every time

Discussion in 'Trading' started by zanek, Apr 14, 2010.

  1. zanek


    I'm sure this is just par for the course for trading, but wow, just wow.

    I enter into a trade, and arbitrarily set a random stop below my entry. You know what happens next. Some how, the market always falls as soon as buy in, hits my stop on the penny and then proceeds to go way up.

    What the hell ? I've seen this time and time again, and it makes me laugh. I mean really, what are the chances that I picked the exact low point to the cent. I'm not even using S/R or pivot pts.

    And yes, I know the market isnt out to get me, I just think its funny how it works out for a 1yr old trading newbie like myself

    Perhaps its the market makers , I'm not sure, but I'm considering trading without stops and only selling when I see key indicators turning against me.
  2. Put your entry where you normally put your stops
  3. You do? Wow.
    Which 'key indicators' are you referring to?
  4. You're telegraphing where you are...........and your intentions at a specific price point. Identifed prey.

    You might consider trying mental stops in conjunction with alerts. Then decide if and when you get an alert whether to exit. Renders the matter discretionary rather than mechanical.

    You might also consider pre-empting your stops. You should be green after three hours (and certainly at the close).

    You might consider a more quantified (than random) stop. Basis minsus 2.5 ATR's is hard to hit but a clear warning when hit. Reflects a half week of price movement in net one direction. A 20 day ATR aproximates a month.

    Stops that cluster among participants are apt to be taken out.

    This is all in the context of swing trading.
  5. Put in an order to double down where you would normally put a stop. If it keeps going against, keep doubling. When it turns, close out at a big fat profit! Easy as pie!
  6. One reason is the "volatility" of the market. A high volatile stocks tends to have large stock price variation (up and down). So if you set stop randomly below your entry (which is not advisable by money management), the higher chances you will get stop as early if the market is volatile.

    This can be done by selecting low volatile stocks by analyzing to <a href="http://www.stock-trading.me/2010/04/calculate-stock-volatility-avoid-stocks-with-highest-volatility/">calculate stock volatility</a>.
  7. You need to dump a lot of your past trades into a spreadsheet, perhaps converting them on a % basis so you can compare across entry/exit and worst/best prices during your trade. Then, you can test different levels of stops (as %s(, and see where your personal "sweet spot" is) In other words, at different levels of % stops, what is your overall profit?
  8. schizo


    Do you mind posting your trade log stating where you got in and where you got stopped out? Unless we can see the actual data, nobody can tell you what you might be doing wrong.
  9. DrEvil


    Most will say that your entries are bad. What I will say is welcome to trading. Get used to it. The market will fade most of your entries. It's what you do AFTER entry that makes the difference. I recommend that you stop and take a good look at how you are behaving while IN a trade, not just the bad trades that are dead wrong from the start but the winners too. Good luck.
  10. donnap


    LOL. Great answer:p
    #10     Apr 14, 2010