Here is my latest article on placing a stop. Hope it helps.

[Dazz]

The "psychology of the stop" is arbitrary... that is "how comfortable am I risking "x" on this play"... which in itself is arbitrary... IOW, a guess. Some guesses are likely more correct than others, beyond just "good guesses".

I agree with Scataphagos; the psychology of a stop cannot be measured, defined or observed. Might as well talk about the spirits of a stop or karma or mojo.

 

[taowave]

So you never adjust for volatility?

Yeah, "wide stop" works out until it doesn't.... when you get hurt BIG!

IMV.... any trader who plays with a "wide stop" is a fool!! (That is, you don't KNOW it's correct to give the market a "wide birth"... and when you're wrong, it hurts a lot.. no reason to EVER take such risk!)

 

[Scataphagos]

So you never adjust for volatility?

No. Recommend NOT "adjusting stops". Have your thinking done at the time of the trade.... that is, "risking ___ on this play, that's it".

 

[taowave]

Ok,I get it...Price action/TA first foremost and "only"...

You dont factor in "derivatives" of price..

Do you trade equal dollars andrisk equal dollars??

No. Recommend NOT "adjusting stops". Have your thinking done at the time of the trade.... that is, "risking ___ on this play, that's it".

 

[Andrea Wylan]

I agree with Scataphagos; the psychology of a stop cannot be measured, defined or observed. Might as well talk about the spirits of a stop or karma or mojo.

Part of the point of my article is that there is less anxiety and more calm (psychology) by placing a stop at the start of the trade. At least there was for one trader. Perhaps many. . .

 

[Tradex]

Part of the point of my article is that there is less anxiety and more calm (psychology) by placing a stop at the start of the trade

Absolutely, Andrea.

In fact the trader should place the stop before even initiating the buy/sell order itself!

 

[taowave]

Not sure how you could not place a stop at the time of trade....

 

[Scataphagos]

Ok,I get it...Price action/TA first foremost and "only"...

You dont factor in "derivatives" of price..

Do you trade equal dollars andrisk equal dollars??

I wouldn't say, "to the exclusion of derivatives"... after all, "market holding 50 day average or 200 day average" are price trades. But as to something like MACD, then no.

Do you mean, "always trading/risking the same amount of money"? If that's your question, then no.

 

[taowave]

Then you my friend are an Artiste!!!

Thats a compliment.assumi g you make money

I wouldn't say, "to the exclusion of derivatives"... after all, "market holding 50 day average or 200 day average" are price trades. But as to something like MACD, then no.

Do you mean, "always trading/risking the same amount of money"? If that's your question, then no.

 

[Scataphagos]

Then you my friend are an Artiste!!!

Thats a compliment.assumi g you make money

Someone posted today, "Nasdaq just closed under the 50 day moving average" and is therefore expecting downside acceleration.

Alternatively, the downside break is small and not much different than having held the 50 day. In addition, today's action was a "tombstone doji at the 50 day". That could easily be a bottom and the end of this little correction. Don't be surprised if the market is up a good amount tomorrow.