Quote from iloveoptions:
Well, it went - 37.75 from the profit peak, but just -15 from his entry. However, if he's like most long term traders gunning for at least 2:1 R:R, then his stop is quite justified. Of course, all of us traders like to justify our stops by making our targets at least twice as much before we announce them to the public. Funny breed of people we are, lol
In terms of seasonality and earnings season, he's going against the grain. So unless we have some nasty news in the weeks ahead, his odds are slim that he'll achieve 110 point profit against his 56 or so point stop loss. Only time will tell...
I understand a wide initial stop on such a trade to adjust for "noise", but I don`t understand leaving the trade open like it was done unless he went on holiday for a while and did not have time to manage the trade.
With a 58 point stop, he can afford to be wrong many times with a smaller stop (20 points?) and still get paid the same or even more if he can work an entry closer to a potential top.
As an example, if he were stopped out at breakeven like I suggested, he could now enter new sell orders at 14,50 and get back in.
If not filled and the market continues higher, he could trail his sell orders on a daily basis until triggered. He may end up with a much better entry on his short position.
I`m not a long term trader at this point though, so this is merely me thinking out loud
And who knows, we might even reverse from this point and he may get paid massively.
Personally, I`m still pissed that I got stopped out B/E @ 99 and the market only traded a few ticks against that before rallying
I`m intrigued by the idea of getting a good initial day trade entry and then letting the trade run if one is lucky to catch a turning point. The R/R can be incredibly sexy
I imagine that if I had two accounts, this could be done easily. Still, my ability to predict long-term direction is pretty lousy so the long from 99 was a crapshot anyway.