A list from the a book in 1926 by THOMAS GIBSON The Chapter is titled: Causes of Loss page 13 The principle causes of loss in a security market operations may be summarized as 1. overspeculation 2. greed 3. ignorance and misunderstanding 4. credulity 5. fear 6. stubbornness 7. impatience 8. dependence on tips or market apperances 9. THE EMPLOYMENT OF STOP LOSS ORDERS! 10. dependence on charts or other mechanical methods The book then continues in detail for every number 1-10. there is knowledge hiding in the past
http://books.google.com/books?id=zt...esult&ct=result&resnum=2#v=onepage&q=&f=false one of his books for free on google.. for you! enjoy!!!!!!!!!!!
Fair enough reply. I do not believe that "discretion" can be taught, so therefore if you are trying to teach someone your system, it has to be quantifiable. And everything can be quantified, it just might not be possible now. Even emotions can be quantified in terms of neurotransmitter modulation. Science is just beginning to delve into this field. Soon, emotions like love will be quantified and reproducible in laboratory settings. For example, love has always been thought to be this magical feeling that transcends everything else, but neuroscientists are discovering that it's actually just the body's response to serotonin, dopamine, oxytocin (not to be confused with oxycontin, lol), norepinephrine, vasopressin, etc. In fact, it's really not too dissimilar from addiction to a hard drug. Anyway, all the trading emotions, fear, greed, etc., are also responses to neurotransmitters. So technically, even emotion can be quantified... just not quite yet.
Curiosity - if you don't use stops, how do you know when to exit a trade that has gone against you? Also, was your $1000 drawdown a result of a trade going against you that perhaps could have been minimized by having a stop loss in place?
Correct me if I'm wrong....you recently opened an account and you're very new to trading and did 70% in 3 months, correct? When I started trading I did 100% for 3 consecutive months and then nearly blew up. Market conditions changed and I almost washed out but that's when I really learned how to trade. If this describes you enjoy it while it lasts because it won't. The market will change and you're gonna start losing but that doesn't mean you won't get better. Listen to the words in this tune. Lot's of meaning in these lyrics. http://www.youtube.com/watch?v=44xirQ55IgA&feature=PlayList&p=2AB7A5BD2D57882E
This actually puts you well ahead of the curve although 95% of ET will argue with you. There are much better ways of managing risk than using stops. Stops are for those who don't understand or are too lazy to use basic math.
Your post makes the incorrect assumption that all trades must go in your favor after entering. Much to learn, but that's ok
very few of my trades ever go in my favor in the beginning.. i take the heat.. I just lost 800 buck today shorting sugar.. near teh top.. but due to the fact that the sugar contract is too large for me to scale in and out of i will not trade it anymore.. the 1000 dollar drawdown was not a realized drawdown. i ahve never had a realized drawdown on the overall account. the 1000 drawdown was in ung and i held and purchased more and ended up turnign those poitions into a gain. i would have continued to sell into the sugar rally, but i could not stomach the size of the contract.. i added 1 position and then a minute later w down 800 bucks.. too rich fo rmy blood right now.. so back to stocks and being able to scale in and out. A stop would have been worse.. it would have made my unrealized loss of 1000 and actual loss of 1000! instead it turned into a gain of roughly 800 bucks. anyway .. i have been trading for years and decided to do an 8K account so peopel can realize it si possible to make money in these markets without using enormous sums of money. Conclusions.. stops are for thew weak.. for the bottom of the food chain!
Dude, you are going to blow the fuck up. I've done what you're doing and I can tell you from experience you're goose is gonna get cooked!