I'd like to become a better trader
- Thread starter PO
- Start date
Quote from Laissez Faire:
Further, I disagree about a fixed stop. It does not make sense.
I would rather operate with a maximum stop known in advance. Not
Having a fixed percentage risk per trade that you never exceed is what it`s all about. If it can be less, then all the better.
Just some thoughts
LF
Couple of things
How is a fixed stop, not a maximum stop (and I disagree with the concept of a "maximum" stop any how)
Second point.... (fixed %)
Youâre saying
As your account increases, so does the amount you riskâ¦.
As your account decrease, so does the amount you risk
Seriouslyâ¦.
And how do you achieve this â varying the share/ car sizeâ¦, or the changing the distance your stop is away from your entry
And you change this how often â every trade?
RN
Why fixed stops for the plain jane day trader
1.) Having a random stop, means you think you can control / second guess the market / a given tradeâs outcome (if only I give this one more room, itâll work⦠ah this one however needs less room)) â you canât
2.) Traders are risk managers first â using a moving target stop loss; negates â that responsibilityâ¦, that toolâ¦, and that abilityâ¦
3.) If I have fixed cost, I can manage that⦠If I have random cost, no one can manage thatâ¦
4.) Stops are the only control we have once weâve entered â you want a sledge hammerâ¦, or a rubber hose - to exert that control
5.) Fixed stops help get your mind off of the moneyâ¦, and instead focused onto the task of trading (never do I think about how much I may lose for any given trade, I already know... The ONLY question I need ask is; Do I want to risk this much to see if this trade will work â yesâ¦, no)
6.) Using a fixed stop.., also means you need to wait (patience is a VIRTUE when trading) till conditions are right for your entriesâ¦
Either that.., or you can read price well enough to get in under the current conditions, knowing your fixed stop will give enough buffer to reasonably allow the trade to work⦠or fail
7.) If you find you need to use a variable stops based on market conditions â your trading skills suck â period
=============================================================================================
Admittedly there are times I use B/E stops â (this trade will work or it wonât â but Iâm not willing to spend any more than commissions to find out) so technically I do adjust my stops⦠BUT
I never increase/ decrease my default stopâ¦, or move it once I set it, unless my first target is reached⦠and my targets are solely based on PAâ¦, not some pie in the sky BS I may be thinking about/ assuming will happen⦠(you are a long way from this)
And my default stop â is a set $ amount â that I know â is just outside of the typical move â in what I trade â within the time frame I trade itâ¦
Now if you thought about that last sentence â a light bulb should be going off regarding the next trade I place â when Iâm stopped out for a loss â under typical conditions
=============================================================================================
Random stops are nothing but a band aid, and crutch â for poor trading skills
I know youâre thinking â random hell I pick them based on the current conditions
You are fooling yourselfâ¦
Either trade priceâ¦, or you opinion â doubtful you can do both - I can't
Feel free to blow holes in my comments â it is your moneyâ¦, and your choiceâ¦
RN
1.) Having a random stop, means you think you can control / second guess the market / a given tradeâs outcome (if only I give this one more room, itâll work⦠ah this one however needs less room)) â you canât
2.) Traders are risk managers first â using a moving target stop loss; negates â that responsibilityâ¦, that toolâ¦, and that abilityâ¦
3.) If I have fixed cost, I can manage that⦠If I have random cost, no one can manage thatâ¦
4.) Stops are the only control we have once weâve entered â you want a sledge hammerâ¦, or a rubber hose - to exert that control
5.) Fixed stops help get your mind off of the moneyâ¦, and instead focused onto the task of trading (never do I think about how much I may lose for any given trade, I already know... The ONLY question I need ask is; Do I want to risk this much to see if this trade will work â yesâ¦, no)
6.) Using a fixed stop.., also means you need to wait (patience is a VIRTUE when trading) till conditions are right for your entriesâ¦
Either that.., or you can read price well enough to get in under the current conditions, knowing your fixed stop will give enough buffer to reasonably allow the trade to work⦠or fail
7.) If you find you need to use a variable stops based on market conditions â your trading skills suck â period
=============================================================================================
Admittedly there are times I use B/E stops â (this trade will work or it wonât â but Iâm not willing to spend any more than commissions to find out) so technically I do adjust my stops⦠BUT
I never increase/ decrease my default stopâ¦, or move it once I set it, unless my first target is reached⦠and my targets are solely based on PAâ¦, not some pie in the sky BS I may be thinking about/ assuming will happen⦠(you are a long way from this)
And my default stop â is a set $ amount â that I know â is just outside of the typical move â in what I trade â within the time frame I trade itâ¦
Now if you thought about that last sentence â a light bulb should be going off regarding the next trade I place â when Iâm stopped out for a loss â under typical conditions
=============================================================================================
Random stops are nothing but a band aid, and crutch â for poor trading skills
I know youâre thinking â random hell I pick them based on the current conditions
You are fooling yourselfâ¦
Either trade priceâ¦, or you opinion â doubtful you can do both - I can't
Feel free to blow holes in my comments â it is your moneyâ¦, and your choiceâ¦
RN
I\\\'ve backtested some of my set ups, but not all, but now I\\\'m told that backtesting doesn\\\'t work? What qualifies as backtesting i\\\'m confused...
should I spend more time backtesting intraday set ups programmatically, or just from looking at the charts and testing my set ups on the actual past charts from the multiple previous days?
thanks...
yes. the problem with 1 contract is, first, that I can\\\'t scale in/out. Very different, and, second, 1 contract is too little money for me and I trade it differently, I care much less.
that is a good idea, I need to learn to ignore p&l and trade points, but how do you keep track of max loss for the day without looking at P&l?
that is what happened to me too. So I\'m reevaluating the situation
do you have a daily max stop loss ? or weekly?
Actually that is a good idea that I will use. 2 weeks seems like such a long time!