I didn't realize anybody else could see where my stop is before execution. Or you mean they might push a bit and try to stop the little guys out, and then run on the stock after all the tight stops are executed? And then because my stop was too loose for it to work on me, I am still in and can just ride the stock with the big boys? It does sound like it could work pretty good sometimes.
How do YOU decide where to place YOUR Stop?
- Thread starter GrowleyMonster
- Start date
I didn't realize anybody else could see where my stop is before execution. Or you mean they might push a bit and try to stop the little guys out, and then run on the stock after all the tight stops are executed? And then because my stop was too loose for it to work on me, I am still in and can just ride the stock with the big boys? It does sound like it could work pretty good sometimes.
As far as I know, it depends on your broker / trading platform.
When you enter a stop order in your trading platform,
the trading platform will
- send the stop order to the exchange right away (then people can see your order )
OR
- capture your order info in your computer.
When market hits your stop order level,
then trading platform will send the stop order to the exchange.
so if there is any disconnect / computer problem, your stop order will not be sent to
the exchange and your stop order will not be executed.
Padutrader's response about consistency is the best answer in my opinion. If you are disciplined and NEVER move your stop, you will give yourself the best odds. If you realize that you were picked off on a BS move, you re-enter, immediately. Some of my best trades occurred after getting stopped out multiple times. A very high percentage of my worst trades/days occurred because I "knew" the criminal specialists (yes, specialists lol... I'm returning after a long, misguided career path) were playing games and this countermove was a blatant attempt to hit all the stops hiding behind the huge bid or offer. "Ill just cancel and re-enter after all the mooks get hit". Next thing you know, what would have been a .20 loss on 1000 shares is now a $1.00 loss and instead of taking advantage of opportunities in 3 other stocks, I don't even see them. Why? Because I am not only pissed at the "criminals" for orchestrating this move that I "know" is fake, but even worse I cannot take my eyes off this one stock. My gut is screaming to get out, but I did not realize how valuable my gut was at the time. I have wasted entire days on a loser... All because I was convinced they were coming after my stop. One of my biggest strengths was spotting a very high probability trade
which was the direct result of knowledge gained after getting stopped out once, twice on the ten times. Sorry, I am rambling and all I wanted to do was point out the value of the advice given by padutrader. Good luck!
i know your broker can..and most can guess pretty good
I’ve been at this a very long time, and it’s not realistic to even contemplate any sort of BS notion about placing a Stop “where people can’t find it”. Let’s be generous and say that you are going to have the great fortune to have an intraday trading strategy with a 65% W/L ratio. Obviously you can’t place a Stop eight points away from your trade entry “where people can’t find it” - you’d run out if capital VERY quickly.
If your average winner is say, eight tics - proper trade management strategy dictates that you can’t let your losers run for thirty tics or, once again - you’d run out of capital very quickly.
It’s a really shitty feeling to put together four really solid days (or even a solid month) - and then give it all back in one day.
Another strong consideration is your exposure to the market - are you cherry picking two or three really good risk/reward setups per day, or are you taking a hundred trades per day ?
Also, what markets are you trading ? There’s a large variance between ES and ZN and CL volatility and trading range and market micro structure - they are very different animals.
When I started trading, I learned scalping 30 Year Treasury Bond Futures. I was given my stop loss rule by my mentor and it was perfect for that particular market’s volatility and trading range - if a trade went two tics against me, I went to market (hit a bid or lifted an offer) to puke.
These days, there is so much automation in the markets that bids and offers trade away or disappear in a flash. I have traded from within both the CBOT and the CME buildings and possessed both collocated servers and TT X-Trader - and still missed trades. My point being - your day trading foes are heavily invested in ECN infrastructure and automation. Even puking can be a challenge.
I wish you good fortune !
If your average winner is say, eight tics - proper trade management strategy dictates that you can’t let your losers run for thirty tics or, once again - you’d run out of capital very quickly.
It’s a really shitty feeling to put together four really solid days (or even a solid month) - and then give it all back in one day.
Another strong consideration is your exposure to the market - are you cherry picking two or three really good risk/reward setups per day, or are you taking a hundred trades per day ?
Also, what markets are you trading ? There’s a large variance between ES and ZN and CL volatility and trading range and market micro structure - they are very different animals.
When I started trading, I learned scalping 30 Year Treasury Bond Futures. I was given my stop loss rule by my mentor and it was perfect for that particular market’s volatility and trading range - if a trade went two tics against me, I went to market (hit a bid or lifted an offer) to puke.
These days, there is so much automation in the markets that bids and offers trade away or disappear in a flash. I have traded from within both the CBOT and the CME buildings and possessed both collocated servers and TT X-Trader - and still missed trades. My point being - your day trading foes are heavily invested in ECN infrastructure and automation. Even puking can be a challenge.
I wish you good fortune !
GrowleyMonster,
Good questions.
I have the motto of "Put the stop where it needs to be, not where I want it to be".
I put my stop loss at a place where if I my bet is wrong, it BETTER be wrong. I want to see price go the other way. I HATE fake stop outs.
I do not put a dollar sign on my stop loss location. I look at the chart and say to myself "Look for a location on the chart to put my stop at such that if my trade is wrong, price goes in the opposite direction."
I do not consider the stop loss location until after i enter the trade, cause I focus more on the trade setup.
Incorrect, oh magnificent one, but at least you're thinking. So let me enlighten you.
It is not too expensive for the big boys to go stop hunting high because they recover the cost rapidly.
So what is it then?
The Herd is what they are after which means YOU and all the rest of the gang at ET and the entire trading population out there in the world. Have you not understood already that the lot of you are FOOD for the big boys.?
THE HERD STOP zone is what they are after. This HERD Stop zone is so close to PRICE as to even violate GOD's creation of the distance between the 2 breasts. The bulk of the HERD is in a tight zone STOP all bunched together. But a few members of the Herd like vanzandt, Clubber Lang, Destroyer, TheMickey might set their stops just a tad further. Regardless, the big boys hammer all these clowns on a regular basis. The 4 mentioned above are also very much Herd members, dumb like the rest of the gang and also food for the Big Boys.
The big boys wii never ever dream that there is a cat like Bruce Kovner or Fibo who will place their STOPS soooooooo. far away. in No Man's Land.
Even the Big Boys are not smart enough to understand that Bruce Kovner & Fibo are prepared for that loss right from the instant they pulled the L/S trigger because they are trend surfers who look for astronomical Reward/Risk Ratios not the puny prison ratios to be found at ET
THE STOP:
The stop is calculated mathematically using Capital, position sizing, bla bla all the crap in the zillions of trading books that are vomited daily at ET.
Your STOP is placed as far away as the gnawing pit in the stomach and the puckering up of the anus ALLOWS. That's your limit. Its different for each stomach/asshole combo. Its a very personal thing.
The stop is calculated mathematically using Capital, position sizing, bla bla all the crap in the zillions of trading books that are vomited daily at ET.
Your STOP is placed as far away as the gnawing pit in the stomach and the puckering up of the anus ALLOWS. That's your limit. Its different for each stomach/asshole combo. Its a very personal thing.
I neglected to touch on the corn hole indicator. Although I do not put as much faith in the bung as I do the gut, it cannot be ignored. Solid point.
i use stops based on my ball size. If i woke up on a particular day with brass like balls i don't use stops at all. If i see shrunken balls that day i use tight stops. On a serious note its dependent on what you trying to get out of the trade and also how is the market sentiment ( you can get a gauge of the market in the first hour after opening). short plays tight stops, long plays generous stops. Now a days no matter where you hide your stops it will be hit unless you have a great entry price. My stops are based from 0.75-2.25. most times its 1.25 but then all my plays are for a point or 2 points with few getting me 5 points max.