Do ES daytraders fail because they use 2 point stops?

[stefan_777]

A two point stop last year might seem very tight, but not now.

Now on some sideways days, two points can be a sizeable chunk of the day's range. Unfortunately.

But it always depends on one's trading strategy and expectations.

 

[djmartin]

Quote from failed_trad3r:

I watched a video which said becuase most daytrader in ES use 2 point stops, around 90%. Also 90+% of daytraders fail. Can this be no coincidence? This would mean not trading with a 2 point stop, or not trading with a stop will mean you will make money?

Lets be honest your talking about yourself. where's the video?

 

[failed_trad3r]

heres the vid,... so what do u think???

http://www.orderflowanalytics.com/PlayDailyVideo.aspx?VideoID=91

 

[stefan_777]

Great vid.

I think the take away from that is: don't enter positions until you get a pull back. They pointed out how the shorts at the bottom of the move were probably mostly retail (slower and dumber money).

If anything, it isn't saying one should enter a wider stop. That would be allowing the market to start trending against you to build momentum to eventually take out the wide stop.

 

[Brianharvey]

Quote from the1:

A 2 point stop on every trade with the same size on each trade will lead to failure. Randomness guarantees it. Traders fail to recognize that the market is more random than not and one of the most important tools to battle randomness is position sizing.

what does this statement mean? That you need to increase position size after a losing trade? Or that you need to increase stops with smaller position size??*confused*

thanks

 

[djmartin]

Quote from failed_trad3r:

heres the vid,... so what do u think???

http://www.orderflowanalytics.com/PlayDailyVideo.aspx?VideoID=91

Ok I was trying to be a smart ass, but I think there's some trades you need a 2point stop and others you need 3 point stop. All trades are different.

 

[jorgez]

Quote from the1:

A 2 point stop on every trade with the same size on each trade will lead to failure. Randomness guarantees it. Traders fail to recognize that the market is more random than not and one of the most important tools to battle randomness is position sizing.

You have absolutely no idea what you are talking about.

Try thinking for a change, you never know you just might learn something
useful and profitable.

 

[risky63]

timing is everything..........period.
with a 2 point stop the average trader can make a trade in the right direction to have it reverse and enable you to exit w/small profit or breakeven.
bad entry will leave you at the station saying "wtf ....THEY'RE stop hunting me AGAIN."

 

[icarus618]

Quote from risky63:

timing is everything..........period.
with a 2 point stop the average trader can make a trade in the right direction to have it reverse and enable you to exit w/small profit or breakeven.
bad entry will leave you at the station saying "wtf ....THEY'RE stop hunting me AGAIN."

ain't that the truth

good post

 

[rickf]

(x-posted from other thread on stop-running)

I will use a stop loss (or a trail) once the trade is profitable....but to enter a trade with (for example) a fixed or tight stop loss is just looking for trouble in my book. I have learned (painfully) to give the trade time to develop and not be focussed on 'instant profitability.' Otherwise, I just end up paying the broker, and that's no fun. But I agree there may be 'games' done to 'run stops' --- IMHO that's frequently found with tons of long-tailed candles in a row.

That said, I used to have a 5-point ES stop on all trades when I placed the order, which I kept purely for 'catastrophic' purposes if my network or computer crashed ... that's a tip I picked up from the guy who runs the room I trade in. But nowdays, I find myself not even doing that, and prefer to use more 'mental' or 'time-based' (though still mental) stops and manage my trade accordingly based on market conditions.