POLL: What is your Stop Loss Strategy?

What is your primary Stop Loss Strategy?

  • Trailing stops - usually same size

    Votes: 8 5.2%

  • Trailing stops - variable, based on something like ATR

    Votes: 20 12.9%

  • Fixed stop - usually same size

    Votes: 15 9.7%

  • Fixed stops - variable, based on something like ATR

    Votes: 15 9.7%

  • As part of scaling in/out

    Votes: 1 0.6%

  • Mental stop

    Votes: 25 16.1%

  • Stop based on % of equity

    Votes: 10 6.5%

  • Disaster Stop only

    Votes: 18 11.6%

  • I don't use stops

    Votes: 35 22.6%

  • Time stop, Get out if not profitable after x minutes or right away

    Votes: 8 5.2%
  • Total voters
    155
Quote from Thunderdog:

Just an observation. If you have "given up a chunk of change," then perhaps your confidence in positions has been misplaced. At least to the extent that you did not have an exit strategy, but rather one that actually sought to increase exposure at a point when your timing was demonstrably flawed.

You concluded that such situations remind you to be more accurate getting in rather than being aggressive getting out. But if you were more accurate getting in, then you would not have to average down in the first place. The fact that you are averaging down should tell you that your accuracy is already lacking. How, then, is adding to a poorly timed entry a remedial action rather than a compounding one?
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When I'm bailing, yes, my confidence in the position has been crushed, or atleast my confidence on not losing more than I should is crushed. ;)

Hopefully most of the time my original timing is qualified and justifies a position as well as increasing it if necessary. (usually it is or I wouldn't survive imo.)

So when the market is going against me, its up to analytics to determine whether its an increasingly greater opportunity or not (which it should based on my system).

However if I don't think it is, or I'm feeling weak and chicken out like a sissy (its not all a science :p), I won't pyramid the position for gains, but only scale conservatively in a linear fashion to try to recover loses.

More power to people that can make a good living without scaling. Without it tho, they'll miss opportunities to increase a good position at a cut-rate cost.
 
Quote from Granpa:

...So when the market is going against me, its up to analytics to determine whether its an increasingly greater opportunity or not (which it should based on my system)...
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Would those be the same analytics that got you into the trade that's going against you?
 
Some technical trading systems use indicators (rather than prices) to determine when it's time to exit. For example,
Code: 
Enter long if (RSI(14)[yesterday] < 20) AND
(RSI(14)[today] > 20) AND
(ADX(14)[today] > ADX(14)[yesterday])

Exit long if (ADX(14)[today] < ADX(14)[yesterday])
Systems like this one don't have exit prices so they can't place "stop" orders. Further, since ADX calculations use the High and the Low and the Close, you can't deploy the Excel Solver to find a price that will make ADX decrease, so you can't "reverse engineer" an exit price and call it a "stop".
 
Quote from Thunderdog:

Would those be the same analytics that got you into the trade that's going against you?
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I don't understand your point, are you being a smartass?
 
I've been using fixed stops with bond futures and the problem I've been running into is that my stops tend to be too tight in a volatile market but ok in a tame market. Was thinking of setting stops based on a running standard deviation (think Bollinger bands) so they would be wider during periods of greater volatility. Any ideas from the great minds here?
 
Quote from MarkBrown:

forgot one which i use stop and reverse. always in the market long or short.
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well since they wont recognize the stop and reverse as a stop method i had to vote i dont use stops. :mad:
 
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