Crypto is one of the only markets where they actually work! 24/7...that's unless the entire exchange shuts down sell orders....
Actual data supporting no use of stop losses
- Thread starter wxytrader
- Start date
Crypto is one of the only markets where they actually work! 24/7...that's unless the entire exchange shuts down sell orders....
Found this quote from Ed Seykota..Seems to favor stops
“The elements of good trading are: (1) cutting losses, (2) cutting losses, and (3) cutting losses. If you can follow these three rules, you may have a chance.”
And From Tudor
"[I’m looking for] 5:1 (risk /reward). Five to one means I’m risking one dollar to make five. What five to one does is allow you to have a hit ratio of 20%. I can actually be a complete imbecile. I can be wrong 80% of the time, and I’m still not going to lose…
I’d say that my investment philosophy is that I don’t take a lot of risk, I look for opportunities with tremendously skewed reward-risk opportunities…"
And what I found most true and have lived to tell..
"PTJ has mentioned that when hiring traders he prefers those who have blown up accounts and suffered the pain of large losses. These traders have had risk management seared into their very being. This is a trait that almost has to be learned through experience and can’t be taught."
“The elements of good trading are: (1) cutting losses, (2) cutting losses, and (3) cutting losses. If you can follow these three rules, you may have a chance.”
And From Tudor
"[I’m looking for] 5:1 (risk /reward). Five to one means I’m risking one dollar to make five. What five to one does is allow you to have a hit ratio of 20%. I can actually be a complete imbecile. I can be wrong 80% of the time, and I’m still not going to lose…
I’d say that my investment philosophy is that I don’t take a lot of risk, I look for opportunities with tremendously skewed reward-risk opportunities…"
And what I found most true and have lived to tell..
"PTJ has mentioned that when hiring traders he prefers those who have blown up accounts and suffered the pain of large losses. These traders have had risk management seared into their very being. This is a trait that almost has to be learned through experience and can’t be taught."
I Agee with every thing you said. But your plan calls for stops.
And then what?
You reverse, I accept the loss and look for a new set-up. Just different ways of recovering a drawdown.
i always have negative expectations because i'm paying for my education which is never ending.
having a edge so refined that it will either make money or it will make money.
never do i have the slightest thought a stop is there to save me.
Why is it there?
My stops are there to keep my losses small. Capital preservation.
To get back to your original comments that stops are for people who don't have a plan, my plan calls for stops. I place them at a point where the set-up becomes invalid.
My strategy does make money. Not on every trade or even 50% of them but the winning trades win far more than the losing trades lose.
LOL....sry I find it amusing when people who don't use EW say such things. But regardless...what happens when the market is closed?
LOL...Well you can't make a trade. LOL!!
But regardless...
I assume you are asking how I handle gaps. I have a plan for that. Sometime I get caught and end up taking a bigger loss than I planned for. I take the capital I have remaining and put it to work somewhere else. No averaging down, no positions in my portfolio that are underwater!!
Although I agree that a method needs to suit the emotional and mental makeup of the trader, isn't Cohen only successful because of insider trading? If his entire wealth rests of access to information, then shouldn't his "teachings" carry no weight?