Does anyone trade the eminis ES,YM etc. without a 'stop'.yea that takes guts I know..
- Thread starter increasenow
- Start date
carcanaques. great point. and much more succinct than me.
if you don't have a stop you haven't defined risk. period.
and a mental stop is only as good as your discipline AND the UNKNOWN RISK of all sorts of unforeseen circ's
you are long 10 contracts monday, with a mental stop, when 9/11 take 2 happens and the dow drops 1000 pts . where do you employ your "mental" stop?
if you don't have a stop you haven't defined risk. period.
and a mental stop is only as good as your discipline AND the UNKNOWN RISK of all sorts of unforeseen circ's
you are long 10 contracts monday, with a mental stop, when 9/11 take 2 happens and the dow drops 1000 pts . where do you employ your "mental" stop?
and i will repeat. name me one situation where using a mental stop is preferable to a hard stop with eminis.------->>> randomness and judgment. Not all moves into your stops are created equal. Successful trading requires judgment.
Consider the following example: You take a trigger at a statistically extreme level that has a high probability and the market goes more extreme by 2 points (assuming that's your stop loss level). What should you do? Stop out? Not a snow balls chance in hell would I stop out on something like that. When that happens I will increase the trade. Study the stats of the market....we go +/- 3 sigma all the time and once in a while we'll +/- 3.5 sigma. So if you take a trigger at 3 sigma and we go 3.5 on the SAME candle I should stop out? Absolutely not. Now, I take a trigger at 3 sigma and 10 min's goes by and the trade goes against me at that point should I stop out. Yes! There's a fine line between these two events that a hard stop cannot differentiate between.
It's not the BIG one that will get you - it's the million little ones.
Consider the following example: You take a trigger at a statistically extreme level that has a high probability and the market goes more extreme by 2 points (assuming that's your stop loss level). What should you do? Stop out? Not a snow balls chance in hell would I stop out on something like that. When that happens I will increase the trade. Study the stats of the market....we go +/- 3 sigma all the time and once in a while we'll +/- 3.5 sigma. So if you take a trigger at 3 sigma and we go 3.5 on the SAME candle I should stop out? Absolutely not. Now, I take a trigger at 3 sigma and 10 min's goes by and the trade goes against me at that point should I stop out. Yes! There's a fine line between these two events that a hard stop cannot differentiate between.
It's not the BIG one that will get you - it's the million little ones.
Quote from whitster:
i'll repeat this for the studio audience.
i am NOT REFERRING TO FLOOR TRADERS
the title of the thread referred to EMINI's. EMINI's do not trade in the pit.
also...
the example i gave was one of many. what happens if you get a heart attack?
food poisoning?
etc.
protecting against unforeseen risk is prudent.
and i will repeat. you can (and some do) trade successfully with mental stops.
it is suboptimal at best. disastrous at worst.
and i will repeat. name me one situation where using a mental stop is preferable to a hard stop with eminis.
and don't say a situation where your mental stop is blown through, and the market retraces up, and you get out at a better price than you would have with a hard stop
the point of stops is to protect against risk. you don't know what the market will do. nobody does. it MAY do this. the problem is the situation(s) where it doesn't. define your risk and respect it.
to quote ahnold: "hear me now or pay me later"
you are long 10 contracts monday, with a mental stop, when 9/11 take 2 happens and the dow drops 1000 pts . where do you employ your "mental" stop?--------->>>> And blows right through your physical stop. There's no difference. You're gonna get killed in either event.
also, all profittakingfool (sp?) is saying is that he just adds to a losing trade (again with no defined risk).
yes, that works MOST of the time. the problem is (as is proven mathematically), this GUARANTEES big losses when you are finally FORCED to take a stop.
there have been literally thousands of traders like you, confident that since doublin' down on trades that have gone against you AND past your predefined (lol) stop point has worked in the past, that it will continue to work
you are magnifying risk as the trade moves against you.
and you still have undefined risk
yes, that works MOST of the time. the problem is (as is proven mathematically), this GUARANTEES big losses when you are finally FORCED to take a stop.
there have been literally thousands of traders like you, confident that since doublin' down on trades that have gone against you AND past your predefined (lol) stop point has worked in the past, that it will continue to work
you are magnifying risk as the trade moves against you.
and you still have undefined risk
"And blows right through your physical stop. There's no difference"
there most definitely is. yes, you get some slippage. i'd rather take X points of slippage in the rare event of market catastrophe than take X*Y loss because i waited to trigger my "mental stop"
not to mention that if this happens simultaneous with technical issues on your end (as i keep explaining to you), you are proper f*cked
there most definitely is. yes, you get some slippage. i'd rather take X points of slippage in the rare event of market catastrophe than take X*Y loss because i waited to trigger my "mental stop"
not to mention that if this happens simultaneous with technical issues on your end (as i keep explaining to you), you are proper f*cked
Whitster, you don't have a clue about me. My win rate is just under 97%. If you don't believe me and call me on it I will prove it. I don't use stops because it ensures I will lose and join the majority.
Think about this for a minute.....is there something to be said for defying conventional wisdom? For going against the crowd? Is there some value in doing what others don't? What others shun? What others criticize? Just how do you get to be one of that 5%? The answer is as simple as this --->>> Do what others don't. Just do something different. Buy what they are selling. Sell what they are buying. Increase your positions when they stop out. Know where the stops are. Trade in those areas. The list goes on. You can't expect to win by doing what everyone else is doing.
Think about this for a minute.....is there something to be said for defying conventional wisdom? For going against the crowd? Is there some value in doing what others don't? What others shun? What others criticize? Just how do you get to be one of that 5%? The answer is as simple as this --->>> Do what others don't. Just do something different. Buy what they are selling. Sell what they are buying. Increase your positions when they stop out. Know where the stops are. Trade in those areas. The list goes on. You can't expect to win by doing what everyone else is doing.
WARNING
not to mention that if this happens simultaneous with technical issues on your end (as i keep explaining to you), you are proper f*cked---------->>>> You sound as though you are trading scared. You have thought of every conceivably bad thing that can happen to you. Yeah, shit happens. The big one could happen. If you have your entire net worth in your trading account and can't start over then you have bigger issues than not using stops. Heck, when I start worrying about a meltdown I need to quit and go ask my doctor to up my Thorazine
Shit, maybe 9/11-2 will happen while I'm long a 10-lot, and my internet goes down, along with my DSL, phone line, cell phone, electric company, and my basement floods to wipe out all of my pc's ALL AT ONCE. When all that crap happens to me and wipes me out I will call my bank and tell them to wire the profits that I've taken out of the market over a period of many years and START OVER.
Shit, maybe 9/11-2 will happen while I'm long a 10-lot, and my internet goes down, along with my DSL, phone line, cell phone, electric company, and my basement floods to wipe out all of my pc's ALL AT ONCE. When all that crap happens to me and wipes me out I will call my bank and tell them to wire the profits that I've taken out of the market over a period of many years and START OVER.