Do you use a stop or no?

trader198 · Nov 17, 2013

someone thinks stop loss as insurance.

it is! most insurance is a waste of money, they insurance nothing! car insurance, can not protect accident!health insurance, can not preserve your health.

what a laugh, because you bought a very expensive car insuarnce policy, then you will not have car accident!

better nuture a good driving habit, self-suvive skills, keep alert, to minimize accident and damage!

most time just a luxury comsuing cost!!!

but to do business, before a business just starts, cut costs is a must.

ifyou want to cut cost first, then

NoDoji · Nov 17, 2013

Quote from trader198:

...you are sitting on a winning position, but because of the margin call, you will be liqidated...

I have entered the Twilight Zone.

dbphoenix · Nov 17, 2013

Quote from NoDoji:

Regarding CL, I learned a while back how to be on the positive side of those 20+ tick jumps far more often than not. CL is not an instrument to fight in any way, as the majority of those who've attempted to do so can confirm.

If I ever have reason to leave the NQ, I'll look into it.

tradingjournals · Nov 17, 2013

Quote from cmb:

I do use stops, and contrary to what EMG says ( I have him on ignore) there are effective ways to use stops and I find that its better to get stopped out rather then have a trade go against you and u find yourself hopping to regain some ticks as it that blood red candle keeps getting bigger, and your positions goes from -380 to -420, -460,-500, then u get some hope as it jumps to -260, and u say hey it could jump to -75 next, but it falls to -450 and -600 in the next 5 minutes.

Better to put that stop at -150 and if it gets hit...then you are still in play for the day.

But the placement of stops has to be below the place where the computers will go stop hunting.

here is an example of a trade yesterday

People hide behind a wall, behind a chair, behind a table, etc. Have you ever heard of hide behind losers? If you like it put a

cornix · Nov 17, 2013

For any trade there's a point where you admit a loss. Doesn't matter in the actual form of stop-loss orders or not, everyone uses stop-losses. Everyone. Even in case of "stop-loss" being zero value of stock or a margin call.

xelite777 · Nov 17, 2013

Quote from EliteTraderNYC:

Just wondering, what is your philosophy on stops? There seem to be advantages and disadvantages (I am referring mostly to ES intraday systems)

Advantages:
Lower drawdown
exact loss size therefore easier to manage risk
avoids catastrophic loss in even of market blowup/account blowout
automatic exit

Disadvantages:
locking in a loss for a trade
seems to create a chance for curve fitting if you place arbitrary stop on the chart
seems easier to create a winning system without stops

No I don't use stops, I just love to wake up in the morning and find an $800.000 loss in my account, because some schmuck from the FED said something bad about the US dollar, while I was sleeping

Jokes aside of course you need stops, otherwise just one big mega loss and you are out, especially if you trade on margin.

And believe me, this sudden mega loss WILL happen, you can count on that!

PipScalper · Nov 18, 2013

No stops, I usually trade equity options on an intraday basis. What I will do is hedge my position. If the odds are against me, then I will exit the trade.

BSAM · Nov 18, 2013

First you discover a system.
Then you use stops.
Cause if you don't, you won't last.
Why?
Because nothing works all the time.
Pretty simple, huh?

cornix · Nov 18, 2013

Quote from BSAM:

First you discover a system.
Then you use stops.
Cause if you don't, you won't last.
Why?
Because nothing works all the time.
Pretty simple, huh?

Exactly! For someone, very confident (oh well, too confident) in their signal it may be a margin call. For others point of where it's time to accept a loss is much closer. Doesn't matter. Still a stop. Difference is realistic or unrealistic expectations about your system.

xelite777 · Nov 18, 2013

Another very clever way to use stops is via call or put options, that way the trader is protected (and can leave his position open) even if the market is strongly moving against his position, or even worse, when the future contract he is trading is locked limit up or limit down.