Crushed

[DrEvil]

Quote from Millionaire:

The secret to trading, if there is one, is to keep losses small.

Easier said than done.

The other side of the coin is to press your winners

 

[Redneck]

Quote from andrewbee:

I don't think any trader can avoid disaster days. The trick is keeping the losses manageable in relation to profits, and your equity curve fairly smooth.

Sir,

Maybe I’m totally ignorant here but…

If you’re honestly keeping your losers small and manageable – then by default disaster days are eliminated – no?

BTW – keeping losers small and manageable is not a trick, or luck – it is a skill – and a valuable one at that



Regards

RN

 

[retire45]

http://www.elitetrader.com/vb/showthread.php?s=&threadid=178762

 

[retire45]

Quote from Redneck trader:



BTW – keeping losers small and manageable is not a trick, or luck – it is a skill – and a valuable one at that



Regards

RN

Skill?? I think loss control should NEVER be left to the nut behind the screen. Has this nut not been behind every huge wipe-out in history? Sooner or later you WILL FIND a reason to hang on to a loser, then overtrade. Even if stops are frying you, at least you can trade long enough to get better at stop setting.

 

[Redneck]

Quote from retire45:

Skill?? I think loss control should NEVER be left to the nut behind the screen. Has this nut not been behind every huge wipe-out in history? Sooner or later you WILL FIND a reason to hang on to a loser, then overtrade. Even if stops are frying you, at least you can trade long enough to get better at stop setting.

True – but some nuts are forged to tighter tolerances


As far as hanging onto a loser – I neither covet losers & winners, nor am I scared of them – quite the opposite

I relish losers & winners…. I am friends with losers & winners….. I like and accept losers & winners – equally and completely…..

You see

I have accepted a loser or winner will be the result of each trade I take
I know exactly how much I will lose on each trade
I have absolute control over the mkt’s ability to take my money – by exiting a loser at my choosing
I have total certainty in a completely uncertain environment (btw I feel compelled to add uncertain DOES NOT MEAN random – the mkt is anything but random…)

Now because of these – I have total freedom to trade the way I must

Yes managing losers, (and winners for that matter), are skills – of that there is no doubt


Btw – I still remember a time when I would sit and stare at a position – fretting whether it would win or lose – then seeing price pop against me – and there I sat like a deer in the headlights – watching the losses mount, and mount, and mount…

All the while one inner voice screaming exit, another making a prefect argument why not to exit – while I just sat motionless watching the screen

Not so much skill here – more of a hold, hope, wish, pray, justify, make excuses technique…. No thank you I’ll stick to what I know

Yes the good ole days are gone – but hardly forgotten


Now please know I really don’t expect you to understand what I’m saying here – but no matter as I am not trying to convince you of anything…. You see it will never matter to you or anyone else how I manage losers – only to me and my P&L.

But maybe it will provide some food for thought to someone – just maybe


Happy Weekend

RN

 

[Fractal]

Eloquently said, RN.

Quote from Redneck trader:

True – but some nuts are forged to tighter tolerances


As far as hanging onto a loser – I neither covet losers & winners, nor am I scared of them – quite the opposite

I relish losers & winners…. I am friends with losers & winners….. I like and accept losers & winners – equally and completely…..

You see

I have accepted a loser or winner will be the result of each trade I take
I know exactly how much I will lose on each trade
I have absolute control over the mkt’s ability to take my money – by exiting a loser at my choosing
I have total certainty in a completely uncertain environment (btw I feel compelled to add uncertain DOES NOT MEAN random – the mkt is anything but random…)

Now because of these – I have total freedom to trade the way I must

Yes managing losers, (and winners for that matter), are skills – of that there is no doubt


Btw – I still remember a time when I would sit and stare at a position – fretting whether it would win or lose – then seeing price pop against me – and there I sat like a deer in the headlights – watching the losses mount, and mount, and mount…

All the while one inner voice screaming exit, another making a prefect argument why not to exit – while I just sat motionless watching the screen

Not so much skill here – more of a hold, hope, wish, pray, justify, make excuses technique…. No thank you I’ll stick to what I know

Yes the good ole days are gone – but hardly forgotten


Now please know I really don’t expect you to understand what I’m saying here – but no matter as I am not trying to convince you of anything…. You see it will never matter to you or anyone else how I manage losers – only to me and my P&L.

But maybe it will provide some food for thought to someone – just maybe


Happy Weekend

RN

 

[Redneck]

Quote from Fractal:

Eloquently said, RN.

Thank You Kindly Sir

RN

 

[duhmentor]

Quote from Fractal:

Eloquently said, RN.

+1
Pay attention class.

 

[retire45]

Quote from Redneck trader:

True – but some nuts are forged to tighter tolerances


As far as hanging onto a loser – I neither covet losers & winners, nor am I scared of them – quite the opposite

I relish losers & winners…. I am friends with losers & winners….. I like and accept losers & winners – equally and completely…..

You see

I have accepted a loser or winner will be the result of each trade I take
I know exactly how much I will lose on each trade
I have absolute control over the mkt’s ability to take my money – by exiting a loser at my choosing
I have total certainty in a completely uncertain environment (btw I feel compelled to add uncertain DOES NOT MEAN random – the mkt is anything but random…)

Now because of these – I have total freedom to trade the way I must

Yes managing losers, (and winners for that matter), are skills – of that there is no doubt


Btw – I still remember a time when I would sit and stare at a position – fretting whether it would win or lose – then seeing price pop against me – and there I sat like a deer in the headlights – watching the losses mount, and mount, and mount…

All the while one inner voice screaming exit, another making a prefect argument why not to exit – while I just sat motionless watching the screen

Not so much skill here – more of a hold, hope, wish, pray, justify, make excuses technique…. No thank you I’ll stick to what I know

Yes the good ole days are gone – but hardly forgotten


Now please know I really don’t expect you to understand what I’m saying here – but no matter as I am not trying to convince you of anything…. You see it will never matter to you or anyone else how I manage losers – only to me and my P&L.

But maybe it will provide some food for thought to someone – just maybe


Happy Weekend

RN

RN,

Well said. I am just trying to stress the paramount importance of hard stops for those in their first 18 months (like me!)... The money management variables, "seemingly" random markets, and system development are enough to deal with so at least "fix" one part of the equation till you are much more experienced... Knowing the Maximum loss possible in a day "should" go a long way to remove that "threatened" feeling...

Then again maybe a quick wipeout sends a stronger message than a grinding demise.

 

[NoDoji]

Quote from retire45:

I am just trying to stress the paramount importance of hard stops for those in their first 18 months (like me!)...

I believe hard stops are important at all times. I know a lot of seasoned traders say they use mental stops and honor them fully, but I believe every trader should put in a disaster stop, the max loss per trade you're willing to bear. This can be very far from the stop that would invalidate your trade, but it can protect you against rogue moves, both in stocks and futures.

I've seen a stock that was in a nice stable uptrend for months drop from $19 to $5.50 in about 3 minutes on bad news and never come back. At least a disaster stop would've protected the position against that full loss.