How much is a good Stoploss system method worth?

[Jarym]

MA's are ok, better than nothing, but if for example you entered a position at the very bottom of a trend, then it would take maybe several days for the MA to display a clear signal.

I am not using MAs for entry, and more specifically I would rarely get in at the 'bottom' of a trend. This thread is about exits and I just explained how I exit positions - sell some on rips, sell some on weakness. It works for me - may not work for everyone and that's fair enough.

I do not believe any 'stop formula' will out-perform locking in gains when you get them. I trade the futures a lot and its incredibly rare (not impossible) I enter a position that doesn't retrace back to where I entered within minutes/hours/days. Therefore the more logical action for me has always been to take some off when I have gains and look to get back in on the retracement - it happens more often than the market running away from me and never looking back.

 

[easymon1]

It’s irritating to scroll through.

me digitalnomad,
duly noted, please excuse

 

[easymon1]

to take some off when I have gains and look to get back in on the retracement - it happens more often than the market running away from me and never looking back.

jarym, might be worth the couple of minutes to view the youtube from that hella verbose youtube up there. It's called trading the t-line. A scene of interest re your post is at minute 10:36 seconds where he speaks specifically to your logic on why one needn't avoid 'take the gift' action when re-entry is gonna be a reasonable option.
cheers

 

[fan27]

For years I've struggled over knowing what best stoploss method to use.
I have one on Amibroker which I had coded, had it for years, it's a percentage trailing stop system, but it is clunky.
Difficult to code, restricted to Amibroker, a bit complex and time consuming in its application.

I mentor a couple of people and I must say, my entry system I'm very happy with but a good exit system - well, a bit embarrassing really.

So anyhow I created some notes on various styles of stoploss but never answered the question - "What is an ideal system?

So once again was forced to ponder the question and and with a stroke of luck came up with what I think is about the most user friendly practical and workable method.
Can be used on charts or data with minimal coding, it's the old old story, 'If you don't know it is hard, once you know it is easy'.

How many traders are there who struggle with this issue?

Nobody wants to supply their secret sauce entry method, but what about an exit system? Does revealing this create me as a trader issues?
Is there any merit in selling such a method?

Have you tested your exit method against other alternatives?

 

[themickey]

Have you tested your exit method against other alternatives?

In terms of functionality and practability it is the best I know of and I've looked at stop systems for years.
Years ago was heavily into backtesting, these last few no longer interested as my trading systems are developed. I'm not interested going back into Amibroker and backtesting, this is my last year using AB as for me its become redundant.
Just by looking at what I have with a stop system I can see it works extremely well on stocks and indexes. As mentioned its not for futures or fx I doubt, that's a field which doesn't appeal to me anyway.
I'm live testing atm.
It doesn't suffer from lag or curve fitting.
I can see from forum response on this thread that stop systems are not widely discussed, I think its an area where there is heaps of muddy water.
To be brutally frank ie not PC, many traders pontificate about "YOU MUST USE A STOP SYSTEM!!!" but the reality is, finding something which is user friendly is another story altogether which is best swept under the carpet.
Imo, I have something both user friendly, practical and efficient, thus, purpose of the thread was to bring out traders concerns re stop systems, but it is so far rather muted.
I'll continue to live test and give it more time to see if any adverse results which atm I cannot see or imagine.

 

[easymon1]

user friendly, practical and efficient

mr themickey
what's your take on SR's stop / position sizing gizmo?
cued up,

 

[deaddog]

A stop loss is misnamed as it doesn't stop a loss it usually guarantees one, albeit a small loss. I prefer to call it a capital protection exit.

My system is fairly simple. I follow Will Rodgers advise. "Don't gamble with your money, buy a good stock and when it goes up sell it; if it doesn't go up don't buy it."

I modified that advice. I buy stocks I expect to go up and if they don't do as expected I get rid of them. I don't hold losers in the portfolio. If a stock does what I expect, I follow the trend. A trend break is a sell signal. The longer I keep a position the more room I give it. I've held some positions since 2009 and then there are days when I become a day trader with a new position that changes direction.

 

[themickey]

A stop loss is misnamed as it doesn't stop a loss it usually guarantees one, albeit a small loss. I prefer to call it a capital protection exit.

My system is fairly simple. I follow Will Rodgers advise. "Don't gamble with your money, buy a good stock and when it goes up sell it; if it doesn't go up don't buy it."

I modified that advice. I buy stocks I expect to go up and if they don't do as expected I get rid of them. I don't hold losers in the portfolio. If a stock does what I expect, I follow the trend. A trend break is a sell signal. The longer I keep a position the more room I give it. I've held some positions since 2009 and then there are days when I become a day trader with a new position that changes direction.

How do you calculate your trend? Is it mathmatical or eyeball?
When a new trend begins especially.
Getting back to one of my main issues with stop limits, is it discretionary predominantly?
Does it require constant adjusting/tweaking?
Not trying to lay a trap here, but we need to be brutally honest with ourselves, stops imo are like in a state of flux, where often we 'ummm and ahhh' about "Should I take the loss now or give it more wiggle room?".
All your opinions appreciated.

 

[pstrusi]

For years I've struggled over knowing what best stoploss method to use.
I have one on Amibroker which I had coded, had it for years, it's a percentage trailing stop system, but it is clunky.
Difficult to code, restricted to Amibroker, a bit complex and time consuming in its application.

I mentor a couple of people and I must say, my entry system I'm very happy with but a good exit system - well, a bit embarrassing really.

So anyhow I created some notes on various styles of stoploss but never answered the question - "What is an ideal system?

So once again was forced to ponder the question and and with a stroke of luck came up with what I think is about the most user friendly practical and workable method.
Can be used on charts or data with minimal coding, it's the old old story, 'If you don't know it is hard, once you know it is easy'.

How many traders are there who struggle with this issue?

Nobody wants to supply their secret sauce entry method, but what about an exit system? Does revealing this create me as a trader issues?
Is there any merit in selling such a method?

My suggestion: I've seen pretty often the advantage to have a stoploss order triggered by the system logic and not by a an arbitrary amount. Perhaps include some logic in the core of your system to generate these signals might be more efficient. By the way, this what I did. Obviously there's a toll, perhaps several little loser trades but few big winners which compensates them all up

 

[deaddog]

How do you calculate your trend? Is it mathmatical or eyeball?

I draw a line. Mathematically it is higher highs and higher lows for an uptrend.

When a new trend begins especially.

The existing trend ends. Then you sit and wait to see where price will go.

Getting back to one of my main issues with stop limits, is it discretionary predominantly?
Does it require constant adjusting/tweaking?

Yes to both;

However with a little or maybe a lot of work it could be coded. It is a series of "If/Then" equations that goes on in my mind. A lot of factors to be considered. If I took the time to ask myself why I make my discretionary decisions the answers would be based on reason rather than emotion.

The adjustment and tweaking comes with the time the position is held. I'll sell a stock the same day I bought it if it reverses but hold a stock that has a down month if I have held it for a year and it hasn't broken the trend.

Not trying to lay a trap here, but we need to be brutally honest with ourselves, stops imo are like in a state of flux, where often we 'ummm and ahhh' about "Should I take the loss now or give it more wiggle room?".

I think I posted somewhere that one of the reasons traders fail is using the term wiggle room