not that bad advice. stop loss dont protect u as well as u think it does. if u backtest system with or without stop ull give up profits. sure you might avoid black swans. but one day ull come across a black swan where even a stop dont help you. in that case all that helps is having a maximum of 100% leverage, so you dont get margin calls.
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Cut Loss in Half Using Wider Stops
- Thread starter oldtime
- Start date
not that bad advice. stop loss dont protect u as well as u think it does. if u backtest system with or without stop ull give up profits. sure you might avoid black swans. but one day ull come across a black swan where even a stop dont help you. in that case all that helps is having a maximum of 100% leverage, so you dont get margin calls.
FWIW, I quit those daggone trailing stops, really messed me up. Back to the way I was doing it. Put it in and don't move it.
otherwise, if my stops were targets I'd be the scalping champion of the world. and don't tell me they're too tight, they're plenty wide.
everything is going just fine as long as I don't take profits too soon
the problem with trailing stops is you are always keyed in to some major high or low and once you get outside of breathing room, the trailing stop puts you right back in it
otherwise, if my stops were targets I'd be the scalping champion of the world. and don't tell me they're too tight, they're plenty wide.
everything is going just fine as long as I don't take profits too soon
the problem with trailing stops is you are always keyed in to some major high or low and once you get outside of breathing room, the trailing stop puts you right back in it
Quote from albertly:
Maybe it is not so bad advice.
1. Systems based on chart patterns - need stop loss.
2. Systems based on trend following - may need stop loss
3. Short-term swing system probably - don't need stop loss (in most cases).
One more condition - if you trade without leveraging.
To truly understand if stop loss makes good or harm we need to analyze the MAE and MFE.
For explanation of this idea I would refer you to
Trading Systems and Money Management (Stridsman)
Chapter 17 - Distribution of Trades
P.S. I trade stock (blue chips and ETFs), EOD
Could not agree more. Trading without leverage is a joy. Easy to load large position, whatever you can afford and relatively easy to accumulate profits - stress wise.
It is stressfull to increase account size 10% using stops. It is just fine when you do it without leverage. Although does not sound exciting, speed of increase can be great if you can spot turns.
and last but not least, i fugured out to get short one can do it wia currency, say buy usd. So no chance of ripping you apart.
Quote from oldtime:
FWIW, I quit those daggone trailing stops, really messed me up. Back to the way I was doing it. Put it in and don't move it.
otherwise, if my stops were targets I'd be the scalping champion of the world. and don't tell me they're too tight, they're plenty wide.
everything is going just fine as long as I don't take profits too soon
the problem with trailing stops is you are always keyed in to some major high or low and once you get outside of breathing room, the trailing stop puts you right back in it
+1, very well said.
You/we need those large winners. Bottom line, simple as that. One large winner, cleans out a basket of loosers, second large winner, you keep that as a profit for the month etc....
Just my two cents,,,,my three cents actually,, haha
EF