ES Journal Archive (2009 - 2010)

[Lawrence Chan]

Quote from volente_00:

Do you know what wave uses as a trading stop on his positions ?

Hint

Pretty much the same as buy1sell2

Deep pockets allow you to hang on for the bigger picture.

I'm personally not a fan of this large of stop but it does seem to work for some.

Brokerages do not use stops at all.

Stocks are their inventories, like stores selling varieties.

As long as positive cash flow is generated, who cares about stop loss since most of the inventories are acquired almost free of charge.

95% of traders cannot afford to do that, period.

 

[saliva]

Quote from volente_00:

Where have you been old buddy ?


I was starting to worry about you after the whippings the T day boyz have been giving the shorts. They finally got their payback today.

Howdy!

Sure enough, I did get my ass whipped by them trannies.

Anyway, I've been patiently waiting for this damn government intervention to end. After all, isn't that what your T-boyz were banking on? Hopes and dreams of tomorrow, or what I call "a castle in the sky".

 

[webbma]

Quote from Lawrence Chan:

Brokerages do not use stops at all.

Stocks are their inventories, like stores selling varieties.

As long as positive cash flow is generated, who cares about stop loss since most of the inventories are acquired almost free of charge.

95% of traders cannot afford to do that, period.

LC...i agree with this. I traded equities for almost 17 years most of them at bulge bracket firms. We never used stops when we were accumulating positions. Typically we were doing it as a view ahead of a significant event. Once that event happened we then sold/covered the position, but not because price had moved against us. Always because the reason for the trade we had done had happened and right or wrong it was time to get out. I recently, November, began trading my own account from home, and this idea of using stops has been by far the biggest adjustment for me. I'm still struggling with setting proper stops, and it's affecting my performance. For instance this morning I was short at 863 and set a stop for 865.25. Obviously got stopped out. I re-entered short pretty quickly and salvaged it, but this is what i'm talking about. So...yes it's a huge difference and a huge adjustment for anyone going from a large shop to trading your own account.

 

[saliva]

Quote from volente_00:

Yes



There are other key reversal times such as 3 am, 6 am, 10:30 am , 11 am , 12 pm , 1 pm and 3 pm all which are est.

No offense, but I really don't understand how you and Pek (or anyone else for that matter) can logically argue that prices reverse at these hours. The only reason prices reverse is because they're repelled by either support or resistance. It just coincidentally happens around those hours. But it's just a coincidence IMHO.

 

[saliva]

Quote from webbma:

LC...i agree with this. I traded equities for almost 17 years most of them at bulge bracket firms. We never used stops when we were accumulating positions. Typically we were doing it as a view ahead of a significant event. Once that event happened we then sold/covered the position, but not because price had moved against us. Always because the reason for the trade we had done had happened and right or wrong it was time to get out. I recently, November, began trading my own account from home, and this idea of using stops has been by far the biggest adjustment for me. I'm still struggling with setting proper stops, and it's affecting my performance. For instance this morning I was short at 863 and set a stop for 865.25. Obviously got stopped out. I re-entered short pretty quickly and salvaged it, but this is what i'm talking about. So...yes it's a huge difference and a huge adjustment for anyone going from a large shop to trading your own account.

First of all, this is what sets apart a truly professional trader vs. the rest of us. In order to effectively set a stop, you need to be mindful of not just price, but momenturm and the duration in which a trend takes place (collectively known as PMT). Easier said than done, I know. But it's worth knowing in the long run.

I think I've dealt with PMT elsewhere. Do a search if you're interested in the topic.

BTW I ain't a "truly professional trader" (by even a stretch).

 

[webbma]

Quote from saliva:

First of all, this is what sets apart a truly professional trader vs. the rest of us. In order to effectively set a stop, you need to be mindful of not just price, but momenturm and the duration in which a trend takes place (collectively known as PMT). Easier said than done, I know. But it's worth knowing in the long run.

I think I've dealt with PMT elsewhere. Do a search if you're interested in the topic.

BTW I ain't a "truly professional trader" (by even a stretch).

I'm definately interested. I will look it up. I really underestimated how difficult this part would be. I was thinking about this today. Many traders sitting in a position at a big shop really minimize the skill it takes to trade your own account for a living. It's really night and day! I know I was one of those people and now i'm finding out the reality. I'll keep working at it to get better and figure it out, but it's definately more difficult than i anticipated. This thread by the way has been very helpful.

 

[JSSPMK]

Dudes & dudesses, page 9000, let's party! LOL

Webbma, I am a bit of local piker here, not packing a large one

ImPickersO you did a splendid thing re-shorting, I belong to a camp of some sort of weird type of masachists. At times, I take quite a few hits before I manage to equalise eventually, sometimes not. What's important is that one needs to have absolute belief in whatever method he or she uses, otherwise it's all doom & gloom & no party. Before I joined this party of fine individuals, I used to consider that most trades had to be winners, now, thanks to Buy1Sell2 & of course others as well, I survive with a lower win rate, than before, when I used to make a lot less, go figure!

Best to all!

P.S. Who the hell took out last post on page 9000? Now I AM pissed

 

[Lawrence Chan]

Being aware that you are not playing house is a great start already!

Good luck!

Quote from webbma:

LC...i agree with this. I traded equities for almost 17 years most of them at bulge bracket firms. We never used stops when we were accumulating positions. Typically we were doing it as a view ahead of a significant event. Once that event happened we then sold/covered the position, but not because price had moved against us. Always because the reason for the trade we had done had happened and right or wrong it was time to get out. I recently, November, began trading my own account from home, and this idea of using stops has been by far the biggest adjustment for me. I'm still struggling with setting proper stops, and it's affecting my performance. For instance this morning I was short at 863 and set a stop for 865.25. Obviously got stopped out. I re-entered short pretty quickly and salvaged it, but this is what i'm talking about. So...yes it's a huge difference and a huge adjustment for anyone going from a large shop to trading your own account.

 

[saliva]

Quote from webbma:

I'm definately interested. I will look it up. I really underestimated how difficult this part would be. I was thinking about this today. Many traders sitting in a position at a big shop really minimize the skill it takes to trade your own account for a living. It's really night and day! I know I was one of those people and now i'm finding out the reality. I'll keep working at it to get better and figure it out, but it's definately more difficult than i anticipated. This thread by the way has been very helpful.

My motto is "any good stop is only as good as your entry." That is, if your timing is good, then your stop is useless; if your timing is bad, it's still useless. That's really the whole gist of PMT: timing, timing, timing!

Traders get too hung up on stops and neglect the other side of the equation: entry. For me, a good entry is the main ingredient of success. Remeber, stop is merely an insurance. While it's a good practice to have insurance, that alone isn't enough to make you money.

Needless to say, good trading y'all!

 

[volente_00]

Quote from saliva:

No offense, but I really don't understand how you and Pek (or anyone else for that matter) can logically argue that prices reverse at these hours. The only reason prices reverse is because they're repelled by either support or resistance. It just coincidentally happens around those hours. But it's just a coincidence IMHO.

Computer algorithms my friend.

Never confuse coincidence with correlation.