"No system works if it does not apply a basic concept. Quick cut the losers." trader1974 What method works best to "Quick cut the losers?"
There is a thing called different timeframes. Think a bit. You will place a stop on a one hour candle or you will put a stop on a one minute candle. With the leverage effect of futures, would you dare to put the stop under a one-hour candle? It's just my opinion of course, I don't recommend anyone to do it. Diversify the risk at the entrance. Only add winners if the price is strong. Never add a loser. I hope this helps.
One simple and specific Stop Placement Method with no guesswork on a 1, 2, or 5 minute chart, places stops a few ticks below the lower of the trigger bar or the prior bar. This tried-and-true no-brainer stop is easy to apply to hammer at support trades and the like. By bracket-trading using target exits at prior swings or measured moves etc, a trader can monitor an in-play trade in the background while looking for more trades on other charts. Just a few simple parts.
Biggest load of bullshit I have seen in some time. There’s nobody on earth that could actually do what you are implying there
easymon1, I strongly believe that "Cut losers quickly" is silly. Because once you exit, and trade move on to go in your original favor, the trader regrets it mentally. Then the trader start chasing the trade. It is best to leave a stop loss alone and stop bullshitting around.
Great job easymon1, This is a great example of a logical base trade based on price only, and stress free. I would suggest to put stop loss a few ticks above the hammer bar to be a bit more conservative. But looks good.
That was a Short so...reverse the rule... the chart image shows the stop up there, above my buddy the fitty, which is one of the "@resistance"s that i love to pair them hammers with, which got the show on the road to start with. even more conservative, would be to find a Local low / high in order to have belt and suspenders coverage. clickin on that chart gets it easier to see. in the case above, there was nothing else in the neighborhood, and above the fitty was the wrong place to be, so if it went beyond the stop as shown a few ticks above the fitty, then that's what stops are for and get out was in order. agree with you that a trade like this one allows much less stress, just 'autopilot' with a simple bracket trade using stop and target, set it and forget it. but monitor that baby! lol. the price for that convenience is that some money is left on the table in this case. a hand's on trader could mos def yielded more points on this trade, i mean at least down to after the first green bar beyond the low down by the prior swing lowest low at worse, assuming the mid-trade pullback would have been survived or exit and re-entered. But that's a different take and less simple. i like simple. simple is beautiful, lol. Takin' a chunk outa the middle rinse-and-repeat, beats heavy liftin for the man anyday. give it a shot an let us know what you think.
Well cutting losses is better than adding to them. However, stop placement should be a little bit further than where the market would prove your trade setup to be wrong. Also, although this is not strictly TA, imagine yourself already a professional trader. Not just a pro trader but someone working for a hedge fund. Would someone like that take few tick profit or loss because they are scared to let their winners run or scared to lose too much if they get stopped out. Pretend your boss at the hedge fund is going to review your trades at the end of the day not looking if you won or lost that day but if you traded based on a profitable edge and executed all the trades in the manner that the hedge funds expects. Also, if you realize that your trade is wrong say a few minutes later for example, full colored candles are going against your trade right away, and you did not setup or research the trade based on your criteria for a taking a trade, then yes, you can just kill it right away. Also, don't think this is easy to do. While normally I may just take a scalp, today I took a swing, and it worked out. This is how I need to trade every day and every single trade. I also killed a different trade for a small loss since I had a better risk vs reward on my swing trade. Finally, if you are not doing good on a day, then stop digging yourself into a bigger hole. Have some type of stop loss for the day that once you hit or get close too or go over, you just stop for that day or night.