Are stops a complete joke ?

[bone]

"There is a no-stop, always-in system using 2 MA crossover"

Let me just share what I have found, take it as just my personal opinion:

That MA cross systems (and some oscillators, for that matter) which rely upon the same signal conditions for both entry and exit signals give away alot of profit. Furthermore, they can have a nasty tendency to turn big winners into little winners, little winners into little losers, and little losers into big losers. If you can manage to change your exit signal conditions, then you can really help yourself out.

Nobody said that your exit signal has to be the same genus or even species as your entrance signal.

Another observation would be to look at the market conditions where the system performed the best, and does it match current conditions? For examples, breakouts into long sustained trends favored the original 'turtles', and that false breakouts came to be known as 'turtle killers'.

 

[pfranz]

Though it might seem obvious, I want to recall that stops PER SE don't change a thing with risk. If you believe that they will avoid bankruptcy because they save you from holding a position against the market, think of a trend following trader in a choppy market which continues to stop his trades until he goes bankrupt, then thinks he would have had a gain, hadn't he used stops.
Someone will say that the problem is the trend-follower is not able to follow trends, but I might say that a hedger-position holder is not good at his job as well, if he gets into a trade which kills him.
What I say is: if you hold your position you will go bankrupt in some cases, if you use stops you will go bankrupt in some other, DIFFERENT cases.
Maybe the difference is that stops must be used when you can predict market direction, holding positions+hedging when you can't do it very well.
But is the latter so bad, given that many people say market direction is very hard to predict ?

 

[emg]

Quote from No.Heat:

What EMG is trying to say is....

a) He does not know how to enter, so he enters with extreme underleverage

and

b) He does not know how to lose so he thinks every trade must be a winning trade for him to have positive expectancy


That's pretty much the bottomline.

Unfortunately, u have not post any trades in the es journal and yet u can criticize. That means, u are not a live traders but a sim trader or unemployed or dont like to hear the truth that trading in the futures market is only for traders who have big big bucks. If that is true, u probably only have $1500 left in your account. A failure trader falls into 97% of trader lose trading in the futures market.

Normally, a failure traders are party poopers who does not like to see other successful traders profiting constantly and consistently. A failure trader happens when;

a) poor risk management
b) has no money begin with trading in the very risky market


According to the CFTC:

Anyone buying or selling futures contracts should clearly understand that the Risks of any given transaction may result in a Futures Trading loss. The loss may exceed not only the amount of the initial margin but also the entire amount deposited in the account or more. Moreover, while there are a number of steps which can be taken in an effort to limit the size of possible losses, there can be no guarantees that these steps will prove effective. Well-informed futures traders should, nonetheless, be familiar with available risk management possibilities.


I dont know what is your definition of UNDERLEVERAGE, when day trading in the futures market. Day Trading in the futures/commodity market is for the GENTLEMEN club (HFT Traders, Prop Traders, Fund managers, hedgers) No room for traders who have no risk capital to begin with.

 

[murray t turtle]

Quote from Bingoking:

There is a no-stop, always-in system using 2 MA crossover. Curtis Faith talks about it in his book "Way of the Turtle."

====================

Good, helpful points.


I am no expert on turtles,LOL, but it was a childhood nickname.
''Are stops a complete joke ?'' No;
but most of GM trends are downtrends[short or bear trends]

Mr Z;

And just because they make money @ Bright Trading with GM;
doesnt mean anyone can do it that way...................................

If you must go auto long[uptrends];
some Asian autos do have much better uptrends than GM.
Spell checker not used.

 

[kentraderstar]

Quote from Bingoking:

There is a no-stop, always-in system using 2 MA crossover. Curtis Faith talks about it in his book "Way of the Turtle."

didnt aren't any. you will have to figureout on your own

 

[jsmooth]

I didn't get through the whole 10 pages of this thread...but 95% of you are barking up the wrong tree. It's not about letting your stop get hit...it's about adding to your winners. Stops should be used to "keep you in the game"...the key to long term trading is to always be able to be there the next day to trade...having stops and honoring them allows you to do that. Now once you get yourself into a good trade you need to manage that position. Dont just put a limit order in to sell (and walk away...stay in the trade till the market tells you it's time to get out)...watch the trade and find a place to add and maximize your size and minimize your risk...the keys to trading over the long term...1. Keep yourself in the game (with stop orders) 2. Let your winners run and ADD!...the only problem...this type of long term approach goes against human nature and your greed/fear tolerance....your going to get stopped out a lot and your going to have to hold your winners longer and keep adding...

As for the original posters post...his BAC trade...so you got stopped out at the low...after getting stopped out you should have been watching the market for a place to either short more in a rally or use that low as a place to buy against...just cause you get stopped out doesn't mean you should stop watching that stock/market...usually that's a sign to flip your position or wait (cause you're early) and get ready to get back in...

 

[macroman]

encourage people to check usdjpy back when it was 1.45. Belive or not this was one of my first trades and i bought reasonable position with a stop. Didnt I do that would see rate going to 1.2000 rather quick. Reason, some hedge fund gone bankrupt.

I think one needs stiop for this type of scenario. It is insurance and every insurance costs money.

 

[bone]

Every trader using live money in the live market has a stop whether he or she has the guts or not to admit it. You will get stopped out, whether you do it yourself or the firm clearing your trades does it for you.

The only question about stops is: are you going to do it, or will somebody else do it for you? And don't get me started about the poser purporting that you need $100K to trade a one-lot in the ES. At least be symmetrical in your logic - you have no stop, and you have no profit target.

 

[dalen]

Quote from jsmooth:

I didn't get through the whole 10 pages of this thread...but 95% of you are barking up the wrong tree. It's not about letting your stop get hit...it's about adding to your winners. Stops should be used to "keep you in the game"...the key to long term trading is to always be able to be there the next day to trade...having stops and honoring them allows you to do that. Now once you get yourself into a good trade you need to manage that position. Dont just put a limit order in to sell (and walk away...stay in the trade till the market tells you it's time to get out)...watch the trade and find a place to add and maximize your size and minimize your risk...the keys to trading over the long term...1. Keep yourself in the game (with stop orders) 2. Let your winners run and ADD!...the only problem...this type of long term approach goes against human nature and your greed/fear tolerance....your going to get stopped out a lot and your going to have to hold your winners longer and keep adding...

As for the original posters post...his BAC trade...so you got stopped out at the low...after getting stopped out you should have been watching the market for a place to either short more in a rally or use that low as a place to buy against...just cause you get stopped out doesn't mean you should stop watching that stock/market...usually that's a sign to flip your position or wait (cause you're early) and get ready to get back in...

Finally someone who gets it. I probe (with the trend) until I catch her, hold on and add accordingly. This usually gives my strat a win rate anywhere from 20-50% (47% avg. to be exact for me), but days where I am only batting .25, still can end positive for results and the days I end up around .50 or greater are just silly. I do have sessions where I can finish -10 to -20 points per car, but its a drip in bucket over a month of trades (around 20 trades a day).

To be honest, an edge to me is where you can be as inaccurate as possible and still be able to pull some profits, small loss or b/e. STOPS, proper R:R, and gauging reversals are what allow me to accomplish that. So no, stops are not a complete Joke Emg

 

[Ghost of Cutten]

Quote from bone:

Every trader using live money in the live market has a stop whether he or she has the guts or not to admit it. You will get stopped out, whether you do it yourself or the firm clearing your trades does it for you.

That's not true. If your position value is less than your account size, then you can simply sit on the position regardless of how low it goes. For example, I own several stocks, and I have no stop in them. If they all fall to $1 each, I will buy more, and quickly retire off the absurdly high dividend yields I will be receiving at that price.