what are the odds?

Discussion in 'Order Execution' started by _PD_, Oct 4, 2012.

  1. _PD_


    I am careful about stops, i.e. I don't like to set them at all, for fear someone will see them and take them out for me.
    Today I was busy painting my house and didn't want to be looking at my monitor all afternoon. I set a couple of pretty tight stops, not where they wouldn't be hit, it was OK with me if they were. I had these two positions I've been on the fence about for several days. They weren't big money makers and I set the stops to breakeven. I also considered
    selling them before I went outside, so I wouldn't be bothered.

    Both stops were hit, to the penny, at the low of the day.

    Now I'm a big boy and I'm not ticked; this has happened to me before, several times over the years. My question is, how likely is this to happen? To BOTH of my stops? OK I admit I'm a little bit pissed. How pissed should I be?

    Have at it.
  2. 2rosy


    use options; bid/ask are tight now. there's an implicit stop that wont screw you over
  3. Occam


    I would never use stops -- they are probabilistic suicide when it comes to trading, especially when it comes to market stops in the current equity markets, which mathematically guarantee bankruptcy over a long enough time frame. Eventually, you're certain to get filled at .01 (if long) or XXX,XXX (if short), and if the trade isn't busted, you're finished.

    If I were feeling the need to use stops, it would mean that I was either overleveraged or underconfident in my valuation of the asset I was trading, both of which would lead me to call into question why I was placing the trade at all.
  4. Daring


    Began using stops, could not make a dime.

    Changed to no stops but careful with leverage and things took a turn.
  5. Until you understand this... stick to painting.
  6. Maybe you got picked off for a reason, or maybe it was just bad luck. Chances are your entry was a somewhat popular entry point, and those are often re-tested after an initial favorable run. IMO don't stop using stops ... it's the only way I know of to keep losses small, and you can't win every time. Just work on picking better stops (better entries can help with that too). The B/E stop is usually an easy target, from my experience.
  7. agree w/ everything except for what daring said re using no stops.

    what happens the one time he goes outside to paint his house and comes back in to find the spx locked limit down b/c of a dirty bomb attack in ny?

    bottom line, no one is "out to get you", yes you will bottom tick the market some times but there's nothing you can do about it. it's just the cost of trading.
  8. siki13


    Very likely.
    I often wondered have can things, that you would expect can only happen maybe once a year,happens once or even multiple times a day(well that depends on how often do you trade :) ) .
    All i know is every time you dont open AND close a trade according to your plan
    market is gonna punish you .