"never let profitable positions turn into losing ones"

axeman · May 30, 2004

Never let a winner turn into a loser?

Hmmmmmm..... I have a winning system where the MAJORITY
of the winners turn to losers before they end up winners.

I guess all you guys will never find THAT edge. Cool

Amazes me how much mythology surrounds trading.

peace

axeman

opmtrader · May 30, 2004

axeman, I am curious if you could boost your system performance by doing an MAE study on these trades and not enter until your average loss point has been hit. This could improve your entry on the majority of those trades. Just a thought. I'm sure you've probably already tested this. Keep up the innnovative system development.

I do agree that much of trading lore and aphorisms are sub optimal.

Good thread though. Gets everyone thinking.

axeman · May 31, 2004

Yes, ive tested this. It usually makes things worse.
I have already found the sweet spot, and there still is an
MAE to deal with.

But its good to have a feel of what your average MAE ranges are
so you're not freaking out the whole time when in a trade

peace

axeman

Quote from opmtrader:

axeman, I am curious if you could boost your system performance by doing an MAE study on these trades and not enter until your average loss point has been hit. This could improve your entry on the majority of those trades. Just a thought. I'm sure you've probably already tested this. Keep up the innnovative system development.

I do agree that much of trading lore and aphorisms are sub optimal.

Good thread though. Gets everyone thinking.

SethArb · May 31, 2004

I would instead say

"never let profitable weeks turn into losing ones"

thats been a big problem for me in recent yrs

Samson77 · May 31, 2004

Gordon Gekko even though you've had the arrogance to insult me in similar posts that I have made on different issues that we face as traders. This issue that you are dealing with, I have solved and I will not stoop to flaming or insulting you but I will be a man about it and tell you how you can overcome this trading problem.

The answer is simple.

Once you reach the equal profit potential in the trade as your stop you have 2 choices.

1. Take half off and move stop to breakeven plus a tick and let the balance run for a home run.

or

2. Move stop to break even plus a tick and let the entire trade run till target or exit signal.

nononsense · May 31, 2004

Quote from Samson77:

Gordon Gekko even though you've had the arrogance to insult me in similar posts that I have made on different issues that we face as traders. This issue that you are dealing with, I have solved and I will not stoop to flaming or insulting you but I will be a man about it and tell you how you can overcome this trading problem.

The answer is simple.

Once you reach the equal profit potential in the trade as your stop you have 2 choices.

1. Take half off and move stop to breakeven plus a tick and let the balance run for a home run.

or

2. Move stop to break even plus a tick and let the entire trade run till target or exit signal.

Better write that down Gordon Gekko!

Samson77 · May 31, 2004

Quote from nononsense:

Better write that down Gordon Gekko!

It might be simple but it works like a charm in the long run.

snooptrader · May 31, 2004

Quote from Samson77:

Gordon Gekko even though you've had the arrogance to insult me in similar posts that I have made on different issues that we face as traders. This issue that you are dealing with, I have solved and I will not stoop to flaming or insulting you but I will be a man about it and tell you how you can overcome this trading problem.

The answer is simple.

Once you reach the equal profit potential in the trade as your stop you have 2 choices.

1. Take half off and move stop to breakeven plus a tick and let the balance run for a home run.

or

2. Move stop to break even plus a tick and let the entire trade run till target or exit signal.

GG insult someone? How could someone with his ethics and integrity POSSIBLY do that?

http://www.elitetrader.com/vb/showthread.php?s=&threadid=20917&highlight=2nd+to+last+post+as+gordon

nononsense · May 31, 2004

Quote from Gordon Gekko:

we've all heard this. i know it all depends on how you trade, but how do you decide at what point you enact this rule?

right now i think my biggest weakness is when a trade goes my way a decent amount, but slowly turns into a loser.

obviously you can't say when you're ahead by 1 tick, move your stop to break even. so how do you determine when to do this?

Some more help GG:

Warren Buffet goes by two rules (he says):

(1) Never lose money;
(2) Never forget rule #1.

nononsense

Grob109 · May 31, 2004

Quote from LoosenUp:

Grob109,

So, what is your normal (or average) target compared to your stop loss? What I mean is what is your risk/reward ratio? Please answer in simple English.

I trade in a weird way by your standards.

I do not target because that is a market function. I exit on left side of channels and if a traverse is not complete to the left side, then I exit as price stops moving forward (profit wise). Usually an exit is actually a reversal that enables me to continue in the market on the new side of the market. I leave the market when the volume drops to a noise dominated level.

I'm not good at money management and have little experience at calculating the ratio, nor the two components.