Do you use a stop or no?
- Thread starter EliteTraderNYC
- Start date
Bingo! Just like the oyster does. The oyster has a defense mechanism to protect self from a parasite (a trader does the same to protect against a trade turning bad by always using stops). So the gist of the oyster story is "expect something of beauty but always expect the worst and how to protect yourself against the worst" Traders get out of bad trades to reload for the next opportunity. The oysters way is to recognize something has gone awry and simply wraps it with layers of beauty. Trading is not as easy, LOL (Does all this mean, at the core of pearls lies a piece of crap? )
Nod, always loved the "BIG BAND sound" Guys and dolls getting decked out for a great evening..........
Quote from NoDoji:
Think about it logically:
There's no real loss until it's a realized loss.
An unrealized loss can become an unrealized profit at any time, thereby making you whole again!
Ergo, if you use a stop you're placing your account at risk of loss and we all know that risk management is critical!
Yeah, yeah, I know there are those of you thinking "the OP specifically referred to intraday trading; how to you deal with that???"
Keep in mind that although good traders often talk about the importance of using stops, really great traders have learned to be flexible instead. If you've put on a trade with the intention of closing the the day flat, and price is not in your favor just prior to the close, there are ways to handle this without the risk of placing a stop in the market or closing for a loss.
1. Set an alarm for 10 minutes prior to the close.
2. When the alarm goes off, quickly check the Yahoo message boards for confirmation that your position is right, but the timing's just a little off.
3. Look for at least two other opinions similar to yours. If you find at least two, simply turn the position into a swing trade. (Be aware that swing trades can last from a couple days to several months.)
Occasionally, many months may pass without your position becoming profitable. The truly adept trader knows that when this happens, one can simply shift the trade into a long term investment.
Remember, there's no need to place your account at risk by using stop loss orders once you learn to be flexible with your time horizons.
Plus, there is a key mechanism in place that automatically protects you should things go drastically awry: Broker liquidation
Hahaha, that was hilarious!
Actually I don't trade it at all, in large part because of the characterization you've provided. I don't want to have to fight whatever it is I'm trading.
Which brings up the point of (a) characterizing the markets one is interested in and (b) selecting one which provides consistent profits without dragging one through the brambles.
I'd rather sail through a calm or moderately challenging sea than a tempest.
Stops are to preserve capital.
Where you place them is an art... suggest some chart/technical level.
If you make a habit of trading without stops, at some point the market will bash your brains in.
One trader's stop is another's target. The Market pays successful participants who enhance its signal and cancel out its noise.
When stops go off in large numbers it creates a tail...... The Market hates tails and will pay very well if a trader helps it correct them.
I once tried to trade using stop loss. but I found it is a counter-productive method.
So I went back to my old style. but one thing I learned is how to control risk.
there is several siutiations you must consider risk.
1. margin call, if I use margin, then I must ensure margin call will not happen, so like 1000 point drop in down, and I will not be margin called out, late it goes my favor again. in this siutaion, you are sitting on a winning position, but because of the margin call, you will be liqidated, or you intent to cut loss. in this case, stop loss is useless, since the market may drop gradually, you have plenty of time to get out.
2. another thing is like 911 event, that happens frequently for individual stocks, just stop trading/halting in a live session without any pre-caution. you stop loss is not triggered, you are locked in a no trading status. if the thing goes againt you, that is way out of your stop loss, most likely better do the contrary, double up, and quickly unwind the position to b/e or mininze loss.
in my view stop loss is pretty useless, very counter-productive.
added a little benefit is when you are in lazy mode, your own slippage. since we are not machice, we can use stop loss to elminate some predicted unfavored things when we are in lousy trading mode. that is it. as a matter of fact, when fatigue/losuiness occurs, we should stop trading immeadiately.
so there is no such thing as stop loss. I think stop loss is "smart guy" s martness, or in conspiracy wording, it is wall street's favorite. brokage firms love it, you frequently get in and get out, they love active accounts. that creates huge profit for them.
just like in battlefield, when you carry a heavy protection shield, you become victims of the protection shield easily.
when anicient Mogolian cleaned Europe, Europe had heavy protection shield, but Mogolian has nothing on their body, using the speed, defeated the europe from a country to another.
Trading definitly will create loss. that is a fact. do not deny it.
just like drive a car, accident happens every day, so each day you need put on a heavy protection shield! oh, man, that will make driving miserable!
just take some precaution, do not do txting, donot do talking overthe phone, do not be drunk when driving, accidents will be decreasedly dramatically!
stop loss is for lousy traders. lousy traders are losers for sure. drunken drivers get killed easily.
So I went back to my old style. but one thing I learned is how to control risk.
there is several siutiations you must consider risk.
1. margin call, if I use margin, then I must ensure margin call will not happen, so like 1000 point drop in down, and I will not be margin called out, late it goes my favor again. in this siutaion, you are sitting on a winning position, but because of the margin call, you will be liqidated, or you intent to cut loss. in this case, stop loss is useless, since the market may drop gradually, you have plenty of time to get out.
2. another thing is like 911 event, that happens frequently for individual stocks, just stop trading/halting in a live session without any pre-caution. you stop loss is not triggered, you are locked in a no trading status. if the thing goes againt you, that is way out of your stop loss, most likely better do the contrary, double up, and quickly unwind the position to b/e or mininze loss.
in my view stop loss is pretty useless, very counter-productive.
added a little benefit is when you are in lazy mode, your own slippage. since we are not machice, we can use stop loss to elminate some predicted unfavored things when we are in lousy trading mode. that is it. as a matter of fact, when fatigue/losuiness occurs, we should stop trading immeadiately.
so there is no such thing as stop loss. I think stop loss is "smart guy" s martness, or in conspiracy wording, it is wall street's favorite. brokage firms love it, you frequently get in and get out, they love active accounts. that creates huge profit for them.
just like in battlefield, when you carry a heavy protection shield, you become victims of the protection shield easily.
when anicient Mogolian cleaned Europe, Europe had heavy protection shield, but Mogolian has nothing on their body, using the speed, defeated the europe from a country to another.
Trading definitly will create loss. that is a fact. do not deny it.
just like drive a car, accident happens every day, so each day you need put on a heavy protection shield! oh, man, that will make driving miserable!
just take some precaution, do not do txting, donot do talking overthe phone, do not be drunk when driving, accidents will be decreasedly dramatically!
stop loss is for lousy traders. lousy traders are losers for sure. drunken drivers get killed easily.
I once attracted by prop firms' payout rate using their money. so I inquired sveral of them. through those contacts, I realized those firms generate profit from selling their platform monthly fee and commissions.
they develivered webnair to teach how to trade. all I see is how risk control/TA is impoortant, stop loss is a must. what they try to sell to my view: please lose some, then you want to win back, then you are stuck, so you can work for us (generate commissions and subscribe to their trading platform to charge a fee).
I told them that is too expensive. 200~300bucks a month just for platform is too expensive. I can buy 100lot put/call and turn this 200~300 buck into 20~30k in couple of trades. if there is no such fee, no deposit required, call me. they never return call.
to me, in order to be successful, the thing I must ensure myself is I must first put myself in a winning status, not in a losing status just as I start (charge me 200 bucks is a big losing start). I am very proactive. that is why I am successful.
they develivered webnair to teach how to trade. all I see is how risk control/TA is impoortant, stop loss is a must. what they try to sell to my view: please lose some, then you want to win back, then you are stuck, so you can work for us (generate commissions and subscribe to their trading platform to charge a fee).
I told them that is too expensive. 200~300bucks a month just for platform is too expensive. I can buy 100lot put/call and turn this 200~300 buck into 20~30k in couple of trades. if there is no such fee, no deposit required, call me. they never return call.
to me, in order to be successful, the thing I must ensure myself is I must first put myself in a winning status, not in a losing status just as I start (charge me 200 bucks is a big losing start). I am very proactive. that is why I am successful.