Quote from sprstpd:
I trade with stops and I am not a new trader. My question has nothing to do with my own trading - but thanks for the lesson and attitude.
Apparently, the answer to my original question is no.
If there are no traders using stopless systems succesfully, the question becomes are there no traders doing this because it doesn't work, or because stops have been ingrained into the trading community. In other words, do people just blow off stopless systems because "obviously it can't work", or have people tried and failed at stopless systems and learned the hard way.
I remember reading in Market Wizards (or the New Market Wizards) about some dude who never had hard stops. If the position went against him to a mental stop, he would wait for a retracement to get out on his own terms, instead of a hard stop taking him out. He claimed that by doing this he saved big money. However, this person was probably swing or position trading instead of daytrading (I can't remember the details).
But the point is the same, the market is forcing you out on a hard stop. On average, does it pay to wait to exit the market on your own terms?
To add to your comments above.
Stops, formal or informal, do affect money velocity. If you look at market timing and in particular, between formal events you do, you will see that there is room in monitiring for informal stops (See Wizards). Consider your action as the top layer (most important) and then layer downward from there with other levels of market considerations and configurations.
One of those levelscould be "news". A Wiz probably has handled a spectrum of news. One of the news scenarios that is most common is the spike. All spike have two sides. Most of the volume on spikes has to do with protection systems and computer trading de facto stuff. Think of many other items for these layers under your action.
You have the choice of sidelining automatically with a level of damage or you may look at the solutions available to Wizes who operate in probably the largest contruct of considerations.
I believe there are two tradeoffs for everyone.
One is to do a protection activity informally between your trade events. The other is to focus on a trading strategy who emphasis is the immediate market operating point. A combination of both would be optimum.
the first yields for you an informal iteratively refined stop that is always before you and revised continually. It is backed by a routine C&R update period where the informal stop becomes the formal stop.
The second is a focused trading strategy thatdoes one majot thing as requireded. That is, for a given market pace, you always stay on the right side of the trade. This piece meals profits to you and at the same time keeps you in the immediate vicinity of market prices.
At some point people recognize that they have gone through several stages of dealing with stops in their approach. they have winnowed out lesser safe guard approaches and get to good protection which is divorced from making money. I think reading the Wiz stuff periodically is really a good pastime. Things click once in a while.
It doesn't seem to be primarily a confidence issue; on the other hand it does seem to be related to the boring day in day out realization of the context of the market that is being traded. The greater the consciousness of the bounds seems to lead to a better feeling and context of price values and, concurrently time passing. You can see the ruffles better when the two things above are part of the monitoring.
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