Hidden stop loss and take profit

[doubledoubledoublecup]

How do you determine your max loss per trade.
How does that influence your position size.
I mean if your max loss per trade is a fixed dollar amount then where you place your stop will determine your position size.
If your max loss per trade is a percentage price drop then position size will determine the dollar amount you lose.
Can you give an example of a trade you have made or are considering and explain how you determine your emergency stop.

I am discretionary trader, so things are not always black and white, Technical level and risk tolerance along with other things need to be considered. I try to keep my risk per trade the same, so wider stop smaller size because you just don't know which one of them turn out to be winner.
In the heat of battle specially scalping, you need to react quick and it's impossible to think about all that crap all at once. Sometimes I entered a trade if I realized my stop is too wide, I just scale out when I have the chance.

 

[deaddog]

I am discretionary trader, so things are not always black and white, Technical level and risk tolerance along with other things need to be considered. I try to keep my risk per trade the same, so wider stop smaller size because you just don't know which one of them turn out to be winner.
In the heat of battle specially scalping, you need to react quick and it's impossible to think about all that crap all at once. Sometimes I entered a trade if I realized my stop is too wide, I just scale out when I have the chance.

 

[schizo]

We are on the same page.
Rather than using a stop, hard or mental, I use a what I call a stop trigger. The price has to trade below a certain level to trigger a stop and then a hard stop is entered in the market.
Hopefully this prevents being stopped out if stops are hunted and keeps me in trades that gap down then recover.
The majority of my decision making is done when the market is closed. Way less stress.
I sppose we are doing the same thing just different semantics

These "hidden orders" that OP mentioned protect you from others seeing your order. And hopefully it will save your ass from those who make their hobby hunting down stops.

BTW whether you use stop trigger or not, once you place your order, it becomes visible to everyone and you're just one more fish to be swallowed up alive by these large whales (stop hunters).

 

[deaddog]

These "hidden orders" that OP mentioned protect you from others seeing your order. And hopefully it will save your ass from those who make their hobby hunting down stops.

BTW whether you use stop trigger or not, once you place your order, it becomes visible to everyone and you're just one more fish to be swallowed up alive by these large whales (stop hunters).

Personally I don't think they even know where my stop is. They are looking for liquidity. If that happens to be where the majority of retail traders have their stops, then whether they are hidden or not that's where price will go.

 

[schizo]

Personally I don't think they even know where my stop is. They are looking for liquidity. If that happens to be where the majority of retail traders have their stops, then whether they are hidden or not that's where price will go.

But if most of the retail orders were HIDDEN from view, how would they ever know that's where liquidity is?

 

[deaddog]

But if most of the retail orders were HIDDEN from view, how would they ever know that's where liquidity is?

Good question and I don't know the answer.
Institutions trading against institutions. Drive the price down until buying pressure takes it back up. Once price is perceived to be a bargain, traders or algos will jump in a snap up as much as they can. Then FOMO kicks in. From what I understand in the institutional trading world it's OK to be wrong as long as you aren't the only guy who's wrong. Price will eventually find a level everyone agrees is fair. (But you already know that)

 

[schizo]

Good question and I don't know the answer.
Institutions trading against institutions. Drive the price down until buying pressure takes it back up. Once price is perceived to be a bargain, traders or algos will jump in a snap up as much as they can. Then FOMO kicks in. From what I understand in the institutional trading world it's OK to be wrong as long as you aren't the only guy who's wrong. Price will eventually find a level everyone agrees is fair. (But you already know that)

I too thought for a long time that institutions were trading against each other. But these days, I'm more of the opinion that they're in collusion with one another than merely taking the other side. They do it for the exact reason you outlined above. They know that once they reach a certain price point, all these algos and FOMOs will kick into high gear.

 

[smallfil]

Then what triggers an entry?
For me I look for a pullback then a bar that closes near its high and enter when price moves higher than the prior bar. My stop trigger would be when price moves below the swing low.
Hard stop is below the bar that breaks the swing low.
MSFT is a good example.
View attachment 338990

Are you suggesting that I wait for the stop trigger to enter?
While that looks to be the right decision today, I have found that my most successful trades just take off and don't come anywhere near my stop.

Then what triggers an entry?
For me I look for a pullback then a bar that closes near its high and enter when price moves higher than the prior bar. My stop trigger would be when price moves below the swing low.
Hard stop is below the bar that breaks the swing low.
MSFT is a good example.
View attachment 338990

Are you suggesting that I wait for the stop trigger to enter?
While that looks to be the right decision today, I have found that my most successful trades just take off and don't come anywhere near my stop.

I will look for the You Tube video. The retired floor trader might be better at explaining it.
I will post it when I find it.

 

[smallfil]

Then what triggers an entry?
For me I look for a pullback then a bar that closes near its high and enter when price moves higher than the prior bar. My stop trigger would be when price moves below the swing low.
Hard stop is below the bar that breaks the swing low.
MSFT is a good example.
View attachment 338990

Are you suggesting that I wait for the stop trigger to enter?
While that looks to be the right decision today, I have found that my most successful trades just take off and don't come anywhere near my stop.

The guy's name is Richard Naso and interviewed by Humbled Trader. Here is the You Tube video explaining how stop losses are targeted. When you have a candlestick with a very long tail on a pullback and it closes near the highs, that is probably, the best time to enter the trade. Your hard stop loss could be set 8% below your entry. You know buyers are coming in because of the last candlestick with a very long tail.

 

[deaddog]

The guy's name is Richard Naso and interviewed by Humbled Trader. Here is the You Tube video explaining how stop losses are targeted. When you have a candlestick with a very long tail on a pullback and it closes near the highs, that is probably, the best time to enter the trade. Your hard stop loss could be set 8% below your entry. You know buyers are coming in because of the last candlestick with a very long tail.

Thanks
I don't spend a lot of time on YouTube but I'll stick this on my watch later list.
I use a hammer pattern as one of my set-ups, if all other critea are met.