not exiting losers on stops

Only a fool trades without stops because risk is part of the plan of a trade - without an exit plan, there can be no risk management (unless offsetting puts or some other form of risk mgmt is used).

That said, I myself have gone from a belief in tight stops w/ limited loss to more of a "logical stop" approach - which gives more room for trades to wiggle and I generally try to exit at targets - hence I sell into strength.

I track my trades closely and run lots of sensitivities and have proven to myself historically and mathematically this is the best approach. Knowing I've done my homework alleviates my anxiety when a trade goes against me - because I know my systems well.

When I have a loser, it might be relatively large - but this is offset by the trades that didn't get stopped out by the wiggles!!
 
Quote from Gordon Gekko:

Quote from dereksas:

Conclusion: When in a position, always assume that a monkey made your entry.
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yup! the monkey make me do it. :D
 
Quote from baggerlord:

Good ol' jack, he can turn any thread into a discussion of metaphysical mumbo-jumbo. To clear things up, I graduated from a state university with a 4 yr degree, not a business school. I guess I am a loser because I only have a few setups and can't trade every move, all day long, picking up 3x the range. Jack can, but he won't post any proof(and neither will any of his disciples). I don't claim much , but if you want I'll post my trading summaries to back it up. Jack can't even give a straight answer to a simple question. With all the time Jack spends on here(an awful lot for a 70 yr old) it wouldn't suprise me if he has 10 other accounts that he posts under, and these are his disciples making 10 es points a day.
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I read this:

"I am 20 yrs old(21 tomorrow), just graduated with a degree in Biz admin. I've been running a coin biz for 5 years, been living off it. Got sick of coin people so quit that and am using the coin money..."

Looked like business school to me. I guessed it wasn't grad school thogh.

Are your trades in your journal?? Or is that selective stuff there. Please post summaries so we have a least a little info on what you are doing.

No one here thinks you are a loser. Your journal is the basis of my comments.

Thanks for taking the time to read my stuff; it is good to get a reading from you on whether anything is sticking as yet.

You may be right on target with the number of aliases I use here. Check your poll. If I voted and so did all my aliases, it would be a perfect fit. That leaves the negative vote of 18 or so and 18,000 undecided. I should start a campaign like you did to drum up some votes. Looks like the 4 out of 5 stuff that usually shows up is running a little light.

I am glad you see the limitations of your setups. If your journal works well for 6 months, I think you will be doing a lot better. Usually people double their initial performance about 8 consecutive times if they stick with it. Restarting in a different market probably won't go far towards doubling your performance.

A good starter for doubling would be trading in the PM. The fact that you are there for a greater portion of the day is a killer idea. Use the middle of the day for other stuff.

What I want to see from you are the next four doublings. They would best include:

1. longer holds to get whole trend you entered.

2. entering in the first half of the trend instead of just the end of the trend as you are demonstrating.

3. start to include stops in your summary; I can't believe you left any one of those trades on stops. The pace was really clicking as well when you jumped ship.

4. Drop one set up a week (the lousiest left on your list) so you can learn to use the ones that work. (see 1, 2, 3 above)


I know this sounds meta something to you and mumbo jumboie

Knocking off five doublings should be easy for you. And not just because of your established journaled base line.

Wait until you have some money, then the doublings get pretty easy.

In ES, scientist is knocking down 8 pts a day which is quadruple his 1 to 2 pt standard for the normal performance of others. Your first doubling in YM will put you even with him. Electron does better than I do it looks like.


It will be neat to see you get some good summaries rolling. Take a look at the chart I did for your first results. I added the time of the trades and the other indicators and stuff you said you use. Put a little marker on the signals from them so others can grasp what the signals are. I couldn't devine any to substantiate your trade times. Still a little foggy.

You might want to glance at electron's 2 pager that covers 5 set ups and paraphrase his presentation style in your jounal. If you powerpoint it you can lift phrases for your summaries remarks column as well.

I like that exit you do based on "if it isn't moving fast enough". Very mumbo, but you get no jumbo from it.

Traderkay asked me to post trades in February. I'll be posting ahead of trades starting around labor day and if I feel well enough and can maintain my ability to speak aloud once again I'll do a vocal narrative that is about the same as your attention span in the am. This combo of posting ahead and narration seems to allow coattail trading which is better than summaries. It has a real touch too.

Think up some kewl words to critique how spooky it can be considering a leading real time oral commentary. Meta whatever doesn't hack it and neither does mumbo jumbo.
 
GG,

I did a lot of backtesting years ago and came to the same conclusion. Stops will hurt the profitablity of a good system, provided the system has some sort of self-corrective exit or stop and reverse. The other side of it is that there is a point beyond which daytrades seldom come back. Cut losers off at that point and your results improve dramatically.
 
Jack, that last post actually made a lot of sense to me. I've been studying all day and realized I am getting too jumpy on my exits. I don't trade PM's right now because of my job, and also I think am's are way easier to trade, with big trends most of the time. Despite my cockiness(gimme a break, I'm a dumb kid) I do know I am still very green and want to stick with the easier trades for now. In a month I might start trading PM's when I start my new job. This thread is way off topic now(sorry). I'll label my charts better like you suggest, and will explain the types of trades I take in greater detail later. I would love to hear you call real time trades. If you are half as succesful as you claim to be I will eat my words for all eternity.
 
Quote from Gordon Gekko:

one of the things i really do believe is possible (and could make you more money) is to exit bad trades when they don't go how they should, instead of getting out at some far away disaster stop.
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Yes, I exit trades if they start looking bad, even if it hasn't hit my initial stop. Either just a market order, or I might move my target to breakeven and tighten up my stop.

But I also set a proper stop from the beginning, where I would consider the trade to have gone bad. Thus the amount depends on the trade setup. After that, I have the choice of not entering the trade if the properly set stop would involve too much risk.

If your stops are all "far away disaster stops", and your only 'exit at a loss' option is hitting this stop, then I agree, this is not the right thing to do.
 
Quote from Gordon Gekko:

HERE IS A PERFECT EXAMPLE/ANALOGY:

say you type in the URL of a web site. if the site doesn't come up within a few seconds, you may realize it is down or something and either exit your browser or visit another web site. HOWEVER, YOU COULD SIT THERE AND WAIT TIL INTERNET EXPLORER COMES BACK AND TELLS YOU THE "PAGE CANNOT BE DISPLAYED."
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GG - I see one major flaw in your analogy - and the same flaw applies when comparing it to trading - you are assuming that you will end up getting the "PAGE CONNOT BE DISPLAYED" message.

Maybe, for any of 100's of reasons, the sites response time is much slower than normal. Maybe if you had just waited for 2 more seconds the page would have been displayed and you would have ended up where you wanted to be in the first place.

An "experienced" computer user has absolutely NO idea if the site will come up or not while waiting for the result. You state that an "experienced" trader knows if he is in a losing trade or not - how is that? If that is the case, then surely the "experienced" trader would have simply not entered that trade in the first place - why would he have more "knowledge" of the market when in an open trade instead of when first entering a trade?
 
That installing stop-losses into a system will deteriorate results compared to previously backtested results is common. The fundamental idea of the stop loss is to prevent a formidable price shock from exacting a load of capital out of your equity. The balance is in finding this stop that accomplishes that task without killing off a bunch of one's otherwise not-so-terrible trades. Obviously, this rules out very tight stops. So, the most natural place for a stoploss is somewhere out of the noise range where the trend changes, that's most probably going to be at popular S/R levels or MAs. I tend to think that 20 day and 40 day MAs are commonly looked at for that purpose.

I've read Jack's stuff on wash trades and reversing, but either I'm missing something (even with the best reading comprehension skills it seems) or not, it seems to me that it can be like chasing a dog's wagging tail. Wash and Reverse if the BO fails, but that doesn't stop another whipsaw, or 2 or 3, from its subsequent excursion. Maybe wash and wait instead, and see where it's headed, and then pick up the trade in that direction, but that still doesn't rule out more whipsaws at the new entry point regardless.
 
Your typical winning trade looks and feels like x, and the noise, if any that comes before x, is y. If you don't detect x, or if you don't detect y, then exit. Waiting for some predetermined stop in order to dull the pain of a trade that is not a winner (even though its not a loser yet) is just deceiving yourself. The better I trade the more clearly I recognize this distinction.
 
Quote from gms:



snip...

I've read Jack's stuff on wash trades and reversing, but either I'm missing something (even with the best reading comprehension skills it seems) or not, it seems to me that it can be like chasing a dog's wagging tail. Wash and Reverse if the BO fails, but that doesn't stop another whipsaw, or 2 or 3, from its subsequent excursion. Maybe wash and wait instead, and see where it's headed, and then pick up the trade in that direction, but that still doesn't rule out more whipsaws at the new entry point regardless.
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"The wash and wait and see where it's headed" Is a thorough way to operate.

New potential opposite trends may be linked consecutively or not.

Two major possibilites exist: Slow trends do reverse most of the time and are linked consecutively. Fast trends usually go to S or R and then consolidate (whipsaw congestion type stuff) instead of reversing. Dog tail wagging picture.

This lets you always have a strategy. Both slow and fast trends finish with a failure to traverse within the existing channel.

Trumping the situation is best. Adversaries like scalpers operate in an entry/exit modus. Smart money is always runs ahead of the herd. All others are already "pushing" your profits by their "herd lag".

By going from "continuation" to "change" as a modus, you gain by using a reversal into holding as the others exit. This makes your status as a "hold" while you are facing future "entry" ploys and smart money.

You move to further trump with a monitoring approach that recognizes that the end of every continuation trend is "overlapped". For slow trends, the point 1 of the new trend is embedded in the end of the old trend. Similarly, for consolidations, at S or R in fast trends, the first half cycle (your opitimized exit point) is the actual failure to traverse inside the old trend.

All this overlap is where to start thinking about "where it's headed"; it is headed somewhere rather than wagging. Graph in a horizontal line from point 1 (the failure to traverse point). Then, point 2 occurs just after the BO on the old channel. Provisionally, see this as the consolidation horizontal channel width where you will trade against the scalpers by leading them with a second reverse as they "enter". You are entering again ahead of their entry. You and they are on the same side of the trade. Previously, they became sidelined as quick exit after you reversed and then began your new hold. Knowing how scalpers operate is important. At the fialure to traverse, they reach ahead of the traverse to grab the opposite side of contracts that would be priced to advance the traverse. As the failure occurs they scalp off the profits by exiting and waiting sidelined. In effect, if you are swift, you play just ahead of scalpers on the same side of the market and their exits "drive" volume on your hold.

OT. There is an important comparison between seamless continuous traders and scalpers. Scalper use T&S to trigger and exit; SCT's use flaws to trigger. Both are in scalper trades simultaneously on the same side of the trade. Fortunately, the flaw trigger preceeds the T&S triggers. Floor noise used to be the monitoring device for both trading advents. scalpers are doing entry/exit. SCT's are doing reverse and hold. the first step for scalpers is to take on risk and correspondingly SCT's lock in prior profits and, of course take on same risk. Scalpers quit (exit) on T&S triggers and this is the "no flaw" hold time of SCT's. SCT's endure risks while scalpers sideline for the next price formation signal from T&S. "No flaw" risk after perfect entry, is the consumate partnership in trading. Examining and understanding these periods of the market are extremely important. They are silent times primarily because there are no signals just time intervals between steps of sequences. It is difficult enough to mentor people to the understanding of the reliability of sequences. Just beyond that, engendering considering periods of time between events comes into the picture. When money velocity steadiness is defined by gaps in signals, You have a backtesting enterprise based on clocks ticking. Try tucking a clock into a backtesting strategy. The words "wait and see" come presicely from this situation. A PERSON HAS TO RECOGNIZE THAT "WAITING AND SEEING" IS A NECESSITY FOR "HOLDING" IN ANY ON GOING MONEY VELOCITY. I lay out the lighthouse keeper story with his classic statement: "What wasn't that?" when the fog horn failed to go off. Scalpers exit on T&S what wasn't that signals. Scalpers exiting is a good condition for SCT's continuing to hold. By anticipating flaws that induce (indirectly) triggers in the T&S, you maintain an offset that aloows scalper action to "push" your holds with the direct andimmediate measure of pro rata increased volume. End of OT.


Your reversed which optimized prior profits, put you either in the second half cycle of the consolidation (congestion) or the BO leg of the new slow trend. We do not know which.

As always, you look for flaws to see the advent of a market occurance that defines the near term. This is just how the market deals with the horizontal line through point 2. Low volume will give you a bounce off the line and high volume will give you a BO through it. Either way you are in a trump position on the right side of the trade as the action takes place. either you reverse on the bounce and move stops closer on the BO. As a SCT, you are trumping. The bounce which ends in another bounce off the parallel line to point 1 is a neat demo of the scalping volume play. A scalper turn is two volume injections when almost no other players are coming off the sidelines to hold.

You can watch congestion on T&S in addition the the trading and anticipation fractal. I am articulating this stuff as a way to let you understand that the two alternatives that overlap the end of a trend do have a lot of considerations that follow just like sequences in trend main standard full traverses in continuing channels. Congestion goes to convergence as the T&S triggers on lesser impacting stuff and finally the noise dominates as almost all scalpers crap out. some folks here may get with the wlk of their talk. at that time we will have a scalper set of summaries and a learner set of summaries to show us how scalpers and learners do the set up vs. scalp rountine. Since neither has a trump, it will be fun.

Reversing early eliminated the Wash and wait. It also did was equal to locking in profits the same way wash does. The reverse keep the WAIT in the picture but it a risk wait because you are in a trade instead of sidelined.

If risk is a difficult thing, then sideline. Then you come off the sidelines at point 3 (this sets new channel) after either the bounce (use change reversal strategy) or after the BO through the point 2 horizontal line (use continuation enter/exit strategy)

If this is all mud to you do not worry about it. I am just addressing some stuff that some very perceptive people notice. By having this stuff down as something like your habits for driving a car, you can drive better and more defensively. It is KISS once you take a chart and do what this post says. Sort of why didn't I think of that if you didn't. For others it is just corroberative info to parallel their current views. Everything comes together with all the assorted approaches after a while.

Those that crap all over this stuff are just doing their crapping thing. fish gotta swim; birds gotta fly; crappers gotta crap ; and I making mud pies.
 
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