Requesting advice on how to stop moving my stop loss order?

[1a2b3cppp]

Have you been moving your stop because periodically price modifies to your direction?

Is your system one where you average in?

Might price go against you more than 4 points and then finalize for a win, you might want to consider averaging down.

 

[Gotcha]

That's not what's happening. Every time a position has moved against me 4 points, I have always taken a loss on the trade. Losses are part of the game. I want to learn from the loss. I just don't want to be killed from the loss. Your example is what I did many years ago. I researched a volume divergence pattern on low tick bar charts that always "seemed" to work for 1 point. I would make 3 trades in a day for 3 points and then the 4th trade I would lose 4 points. I was right 75% of the time, but I was losing money. I never trade low tick bar charts again. You will eventually get burned.

I don't understand then. If you say you always take the 4 point stop, what is this thread about?

 

[David M21]

I don't understand then. If you say you always take the 4 point stop, what is this thread about?

No. I don't always take the 4 point stop. When the market gets close to the 4 point stop, I will move the stop price farther away from the current market price so the stop won't get hit hoping the market will reverse. If the market does reverse, I will always offset the position prior to breaking even. However, the market usually doesn't reverse.

 

[ElectricSavant]

I understand you...

No. I don't always take the 4 point stop. When the market gets close to the 4 point stop, I will move the stop price farther away from the current market price so the stop won't get hit hoping the market will reverse. If the market does reverse, I will always offset the position prior to breaking even. However, the market usually doesn't reverse.

 

[SunTrader]

... However, the market usually doesn't reverse.

Which is why over large numbers of trades its not wise to move your stop.

A stop is to contain losses but also to tell you your current analysis about the market direction was wrong.

So if you have enough faith in your analysis being right (used to determine stop placement), more times than not, why would you go against it?

 

[ElectricSavant]

Would stopping and reversing help or just make matters worse?

No. I don't always take the 4 point stop. When the market gets close to the 4 point stop, I will move the stop price farther away from the current market price so the stop won't get hit hoping the market will reverse. If the market does reverse, I will always offset the position prior to breaking even. However, the market usually doesn't reverse.

 

[murray t turtle]

Which is why over large numbers of trades its not wise to move your stop.

A stop is to contain losses but also to tell you your current analysis about the market direction was wrong.

So if you have enough faith in your analysis being right (used to determine stop placement), more times than not, why would you go against it?

%%
He hasn't lost enough money;+ that's the worst way to solve it.
Its good to be addicted to water-its a real killer if you are not.LOL. Addicted to action is better than lazy;a plan worked is much better than an action addict, or lazy/small sample.

 

[wrbtrader]

Would stopping and reversing help or just make matters worse?

Best to backtest it first and then simulate trade it to determine if doing such is helpful or makes matters worse.

It's strange because stop placement is one of the easiest things to backtest, adapt to changed market conditions and so on. Yet, its commonly abused or misused...leaving traders confused about what to do to fix the problem when the problem is really just the trader.

Seriously, if a trader has backtest supporting using 4 point stop with the trade signal strategy and that he'll be profitable...its a discipline issue if the trader moves (widens the stop beyond 4 points) that stop in the middle of the trade or lets it reach a -16 point loss...

That's clearly an issue with the trader that's using a trade signal strategy that he/she has not backtested to see for fact that -4 point stops works well with the trade method.

Its human nature to follow the trading plan if we know beforehand the the probability of success. Yet, its psyschologically difficult or nearly impossible to follow the trading plan if we do not know beforehand the probility of success.

Taking a trade with real money without knowing the probability of success is just gambling. Continuing to trade without following the backtest results (probability of success) is just stupidity and these types of traders should not be allowed to trade alone...the needs to trade with someone in person (not online) that won't allow the adjusting of stop loss protection.

wrbtrader