Do you have a mechanical system whereby your computer can signal you as to when the stop has been hit? If so, then I suggest you get the heck out of the way when the trade is in progress, and wait for the computer to signal. This may sound simplistic, but since I share your problem, this has helped me immensly. If you simply can't watch a trade underway without getting emotionally involved - and I can't - then just don't watch the trade. Period.
Blowing Stops
- Thread starter sakimonohito
- Start date
Thanks for turning a new phrase for me to use here jem.
Well it's been two days since I posted my confession about "pulling a neiderhoffer" and it has made a huge difference in my trading. I haven't pulled any stops and more importantly, I haven't had the urge. Sure a market which goes up for three days and being long helps, but I have had my stops hit a few times and it hurt like hell. But I was a man about it (a TRADER about it) and I just went on to the next set up.
So in two days I almost made back my losses for the year minus -144. I had a few winning forex trades but I figured that tonight wasn't a good time to test my luck with the asian sessions. Especially since there is a war ultimatum on the cards. Sure hope George Bush has a stop loss in!!!
Hoping to report again in a few days how keeping my stops in place helped me break that emotional threshold of making "more money than I feel I deserve" or however my subconscious inferiority complex seems to sabotage my success! I'm prepared to face this demon even if he comes tomorrow. I'm not going to pull any stops tomorrow!!!!
I kind of feel like an alcoholic "Just for Today I'm not going to pull any stops."
"Keep coming back, it works if ya work it!"
Well it's been two days since I posted my confession about "pulling a neiderhoffer" and it has made a huge difference in my trading. I haven't pulled any stops and more importantly, I haven't had the urge. Sure a market which goes up for three days and being long helps, but I have had my stops hit a few times and it hurt like hell. But I was a man about it (a TRADER about it) and I just went on to the next set up.
So in two days I almost made back my losses for the year minus -144. I had a few winning forex trades but I figured that tonight wasn't a good time to test my luck with the asian sessions. Especially since there is a war ultimatum on the cards. Sure hope George Bush has a stop loss in!!!
Hoping to report again in a few days how keeping my stops in place helped me break that emotional threshold of making "more money than I feel I deserve" or however my subconscious inferiority complex seems to sabotage my success! I'm prepared to face this demon even if he comes tomorrow. I'm not going to pull any stops tomorrow!!!!
I kind of feel like an alcoholic "Just for Today I'm not going to pull any stops."
"Keep coming back, it works if ya work it!"
WRITE your stop down on paper....SAY your stop out loud prior to entry....Shock the living S@#! outta yourself everytime you let it go. Make sure you leave no room for interpretation of where your stop is located, be it based on an exact price or something else. Knowing the most You are willing to lose on a given trade isn't good enough without being more specific. I think of it as a custom, maximum stop loss exit PLAN. It's very interesting that something so simple can be made so difficult but then again......
think what would "Jesse Ventura" do?
just don't do it.
prob solved. :-/
just don't do it.
prob solved. :-/
You mentioned in your opening lament that if you were better capitalized you would have weathered 'this little short-covering rally'. Excuse me... 796 to 830 ?? I call B.S. on you. If you were better capitalized, you just would have let 10 ES, or 100, or 1,000 ES go 34 points in your face instead of 1 ES. Your problem is that you are right and the market is wrong.
You can't take a monster hit every three or four months and stay alive in this business. And that is a fact. If you think any different, close your account right now and stop pursuing trading as a career. If you had honored your stop, look at how much more money you would have in your account.
Sorry to be so hard, but I'm calling a spade a spade.
You can't take a monster hit every three or four months and stay alive in this business. And that is a fact. If you think any different, close your account right now and stop pursuing trading as a career. If you had honored your stop, look at how much more money you would have in your account.
Sorry to be so hard, but I'm calling a spade a spade.
I've done this a couple of times myself (for my two biggest single losses ever, I should add), and after a bit of self-questioning, I decided I was doing it because a few times, without thinking too much about it, I had slid my stops out of the way and ended up being rewarded by a move back up to my target eventually. So this dumb mistake was being encouraged to continue by a series of "successes," which lulled me into forgetting that stops are there for a reason. Of course, in general our rules are NOT in place just when we feel like it -- they're supposed to be in place to protect us from our own irrationality based on fear, greed, or whatever.
Haven't done it again since I realized WHY I was doing it..
Haven't done it again since I realized WHY I was doing it..
its real simple- either honor your stops, or lose a disproportinate amount to the gains you make from normal trades. if you blow a stop and become stubborn, it is very easy to turn a trade that costs 500 into one that can cost 5000 as you add size and convince yourself that you are right- trust me. My worst trade ever cost me -9000 on 4500 shares and after that, i studied it and my problem areas, vowing never to be a jackass and blow a stop like that again- it took me almost 2 weeks in this crappy market to make it back. never again, i said, and I am very vigilant on my stops now. drawdowns like that are unacceptable and i hated trading from a losing position knowing how badly i fucked up and how much i had to make back. i did it, but it wasn't fun and taught me a lesson.
anyways, the market does what it does, sometimes for strange reasons- as a trader you react to what it does, read the tape, make a decision. if you are concerned about being right all the time over making money and exercising the discipline of your system, you're fucked and might as well start flipping burgers at McD's. if you can remove emotion from your game, then you can act instinctively within the confines of your system and be consistently profitable. i know many traders who were good scalpers but would have a day where they gave back a month or more of profits becuase they:
were tired, hungover, mad, had outside events influence them, were being stubborn, were pissed off, whatever........
and then they proceeded to blow their stops as they blamed their losing trading on these influences. thats bullshit. look in the mirror- you and you alone are responsible for your actions in this business. you know what your rules are, what your system says you should do- you know that when you follow your system it has a positive expectancy and will produce consistent returns- why should it be that hard to follow it? what separates winning from losing traders is the ability to execute their systems without emotion, taking a loss when it hurts but they have to. if you get emotional in trading, it WILL cloud your judgement and will affect your reaction speed and money is made and lost very quickly.
so, ask yourself- would i rather be right or make money????
anyways, the market does what it does, sometimes for strange reasons- as a trader you react to what it does, read the tape, make a decision. if you are concerned about being right all the time over making money and exercising the discipline of your system, you're fucked and might as well start flipping burgers at McD's. if you can remove emotion from your game, then you can act instinctively within the confines of your system and be consistently profitable. i know many traders who were good scalpers but would have a day where they gave back a month or more of profits becuase they:
were tired, hungover, mad, had outside events influence them, were being stubborn, were pissed off, whatever........
and then they proceeded to blow their stops as they blamed their losing trading on these influences. thats bullshit. look in the mirror- you and you alone are responsible for your actions in this business. you know what your rules are, what your system says you should do- you know that when you follow your system it has a positive expectancy and will produce consistent returns- why should it be that hard to follow it? what separates winning from losing traders is the ability to execute their systems without emotion, taking a loss when it hurts but they have to. if you get emotional in trading, it WILL cloud your judgement and will affect your reaction speed and money is made and lost very quickly.
so, ask yourself- would i rather be right or make money????
Quote from bone:
You mentioned in your opening lament that if you were better capitalized you would have weathered 'this little short-covering rally'. Excuse me... 796 to 830 ?? I call B.S. on you. If you were better capitalized, you just would have let 10 ES, or 100, or 1,000 ES go 34 points in your face instead of 1 ES. Your problem is that you are right and the market is wrong.
Bone, I appreciate your feedback but I mentioned this specifically, I would have simply had more contracts IF my account size was bigger and therefore my account would have suffered exponential to my risk. NOT that I could have weathered it out if I were holding more contracts quite the contrary, but if my account was bigger with the same amount of contracts as I hold now(which is a futile thought process as I would have been leveraged the same IF my account size were larger).
The whole point is a matter of semantics because my account IS small, the more important issue is that these huge drawdowns are not a symptom of a bad system (in fact my system gave me a buy signal at 795 which i ignored!!!), they are directly related to my stop management (or lack thereof).
I know from now on if I am not using a hard stop at certain times of the day and it runs through my stop level I AM WRONG and must immediately get the hell out of harms way and if I get a signal to reverse I must do so for the health and posterity of my trading career. I plan on doing this again tomorrow. I plan on doing this forever.
I wish all you blowers of stops a sane recovery and a choice, the road less traveled, the road of the brave and the strong, the road paved with stops.
Holy holy is a stop!
Sooner than I expected. I have made back all my losses from blowing my stop just a week and half ago. I have traded my butt off. This highly volatile market is printing money, IF YOU USE STOPS
Thanks again to everyone for the great suggestions. I feel somehow obligated to talk about my stops whenever talking about trading now.
Quote from sakimonohito:
Sooner than I expected. I have made back all my losses from blowing my stop just a week and half ago. I have traded my butt off. This highly volatile market is printing money, IF YOU USE STOPS
FInished up the day 1,500 in the black. About a 5k reversal in 5 days of trading on my bottom line. NOW, the trick is to stay ahead of the curve by keeping my stops in place. Sure the gains probably will taper off as the volatility retruns to normal, but I can grind em out WITH stops and still make a few bucks.
I actually got stopped out of a huge EURO futures trade -400 I bought the breakout and then it promptly reversed in my face and I was promptly stopped out. The fact that I kept my stop in actually saved me another -400 so I consider it my best trade of the day. I was able to keep my head and continue to trade my signals, and I owe it all to my stops.
Hope to write again next week about how keeping my stops in has enabled me to trade another day.
I'm pleased to sound so panifully redundant for once