NQ - Stop Loss

D

doher

We all know to let the winners run and cut our losses.

What a really nice concept.

I've been trading the NQ's for a month.

Most of my stop losses - have been 2.5 points.

Unfortunately most of my wins are .5 or 1 point.

Needless to say - a margin call may be looming before the great pumpkin arrives.

Often - I'm going in the proper direction - but I get taken out early.

I've noticed at times that the NQ can reverse 5 points in a minute
and then resume the trend.

This past Tuesday - when NQ finished up 51 points - I was down 15 points.

About half my loss was from lack of discipline trying to quickly recoup my loss when i should have walked away and regrouped.

Maybe an electronic circuit breaker under my chair might help.

I've been playing Ema and MACD cross-overs while keeping an eye on pivots, tick,trin and recent high and lows.

I know I must pay closer attention to the 5 and 15 charts.

So much for the preamble, my question is during the past week
what has been your initial NQ - stop loss?

doher
 
I would say a minimum of 5 to 10 points for initial stop. IMHO, then you can adjust it accordingly as the trade moves in your favor.
 
Originally posted by doher
We all know to let the winners run and cut our losses.

What a really nice concept.

I've been trading the NQ's for a month.

Most of my stop losses - have been 2.5 points.

Unfortunately most of my wins are .5 or 1 point.

Needless to say - a margin call may be looming before the great pumpkin arrives.

Often - I'm going in the proper direction - but I get taken out early.

I've noticed at times that the NQ can reverse 5 points in a minute
and then resume the trend.

This past Tuesday - when NQ finished up 51 points - I was down 15 points.

About half my loss was from lack of discipline trying to quickly recoup my loss when i should have walked away and regrouped.

Maybe an electronic circuit breaker under my chair might help.

I've been playing Ema and MACD cross-overs while keeping an eye on pivots, tick,trin and recent high and lows.

I know I must pay closer attention to the 5 and 15 charts.

So much for the preamble, my question is during the past week
what has been your initial NQ - stop loss?

doher
More...

Your first consideration is whether or not you are in a trend, and, if so, how strong it is. If you're in a reasonably strong trend, stoplosses are almost irrelevant.

If instead you are essentially drifting, i.e., price drops back into the intraday range, then out, then back in, makes lower highs, then higher highs, then fades, etc., then your stops will have to be much tighter or much wider, depending on your risk tolerance.

Also depends on your timeframe. Your stops will have to be wider the longer the bar you're trading. You can't have a 2pt stop with a 30m bar. And your tactics will also be a factor, i.e., do you trade retracements, breakouts, enter on the basis of indicators, etc.

All you can do once you've made all these decisions is to make a plan and trade it. If it doesn't do what you want it to do, then change one component and trade it again.

--Db
 
I don't trade e-mini. But basically, I experienced the same problem at my early stage.

At first I thought that my stop loss was too tight.
So I made it wider but with a wider stop my winner had to be bigger, that means hold them even much longer.

As I had a serious problem to do that, I came back to my initial stop loss and decide to :
- let my winner run (for real this time). (Hint : I fixed a minimum holding time. Now, I don't do that anymore but it helps me a lot).
- make a better selection of my shots for not being stopped too often even with my thight stop. (That is keeping my %>50.)

What does it mean in real life ? PATIENCE.
- Patience to wait for long enough when you're in a (good) trade.
- Patience to wait for the good time to enter the trade. (the more you stop is tight, the more you have to be sharp).

Practice (and margin call) will help you to do that.

Good luck.

P.S : As a french guy, sometimes I don't really trust my english. Sorry for some possible mistakes.
 
I had the same problem when I went from IB to Advanced Futures and used their ultrafast software. I used to almost swing trade with IB because of their slow order entry and quotes, so I made money with 2 to 5 trades a day. But with faster software I found myself trading more and seeing too much slippage in NQ. So I trade ES now with more liquidity but use the same swing trade principles on a shorter time frame (fractals at their best). The stops are based on either right or wrong immediately ( almost blew out account too, embarrassing for a profitable trader 3 years straight).

"nothing in the world can take the place of persistence. Talent will not;nothing is more common than unsuccessful men with talent.Genius will not; unrewarded genius is almost a proverb. Education will not; the world is full of educated derelicts. Persistence and determination alone are omnipotent" Calvin Coolidge
 
To "theplumber" - great quote. I just might fit the bill as a persistent unsuccessful,educated, underachiever.

I traded Canadian stocks - NT, CLS, RIM, JDSU etc (only long since summer 2002). I'm down about 65%. I have not traded a stock since May 31st this year.

I thought my problem concerning Canadian stock trading was a lack of liquidity (NT excepted). Also many times the Naz would take off but CLS and NT - wouldn't follow. I think some of this can be traced to January 2001, decimalization. The Canadian exchanges went from nickel increments to penny increments. RIM prior to this often had over 50 cent spreads.

In addition the big Canadian banks pressured regulators - not to let in IB, Amertitrade, Datek etc take on Canadian customers. IB finally was approved for futures.

Likewise Canadian investors were prohibited from opening US accounts.Ameritrade Datek and TD Waterhouse were each fined $800K for allowing Canadian investors to open accounts despite the fact the brokerages were not registered to do business in Canada.

How's this for socialism "We want to ensure Canadian residents have the protection of the law," said Sasha Angus, chief enforcement counsel with British Columbia Securities Commission,

Mr. Angus said the regulators were not trying to punish Canadian investors but instead wanted to make sure they were protected by local laws.

As a result of of of this blatant protectionism - Canadian investors pay on average just under $ 30 Cdn EACH way to trade 1200 or less shares.

I was paying $24 each way- as a result if for example I was trading 100 shares of CLS last year- I had to make sure the stock would move at least $.48 just to cover the commission.

I developed a bad habit similar to x-or:

"At first I thought that my stop loss was too tight.
So I made it wider but with a wider stop my winner had to be bigger, that means hold them even much longer.

As I had a serious problem to do that, I came back to my initial stop loss and decide to :
- let my winner run (for real this time). "

Going long in a bear market with high transaction costs killed me.
(Not to mention extremely slow fills compared to US brokers)
I once put in a simple change of price order -and it took the broker over 2.5 minutes to pull the original order. Needless to say -very difficult to daytrade under those conditions.

"nothing in the world can take the place of persistence"

This weekend I plan to go back and look at all my trades and analyze my entries and stops in several time frames.

I think that I wasted too much time reading trading books bulletin boards etc. hoping to find the holy grail and not enough time analyzing the charts.

thanks for your help

doher
 
Doher,
I am having the same problem this month... bunch of small profits, and suddently, a huge loss.... I took a break from trading this week. :(

... concerning CDN account...
I am a Canadian, and have just openned an account with IB. They have an office in Montreal, and are allowed to accept Canadian clients, however, they don't trade Cannuck stocks. If you daytrade, I think you'll like the US stocks much better, due to its liquidity comparing to TSE bunch.
A friend of mine wanted to short Bombardier when it broke 15$CDN, but didn't have permission to short in his BMO account. He tried buying puts, but lost $$ due to the time erosion. He's quite @#$!!! with all the Canadian regulators.


Cheers !!! :)
 
typical -charge you more, give you less - and as an added bonus poor service at no extra charge.

Then when someone proposes a better more efficient business model they trot out a wall of regulations to protect their monopolies /oligopolies. Free trade in name only

regards

doher
 
I use different stop sizes for different patterns that I follow. I find that any stop smaller than 4-6 points makes it difficult to ride a trend very far.

Main thing is your timeframe and profit objective because your stoploss must always correlate to your trading timeframe and profit objective.

AllenZ
 
are highly leveraged ...

perhaps you can try an experiment

instead of buying or selling 1 NQ at your price

either wait for the NQ to go 3-5 points against that price

then place order ...

thus allowing you 3-5 more points slippage !

OR

scale in using QQQ's or QQQ options

As 1 NQ = 800 shares or 8 options

so scale in maybe 200 at time ?

But still use stops and money management rules
that have been successful for you or that seem to work
based on prior experiences

good luck
 
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