Setting stops on longer-term trades

[farmerjohn1324]

On trades that are longer than swing trades, but not intended to be buy-and-hold...

Perhaps I plan to hold for 2 weeks or even several months before I think my predictions will materialize.

How to set stops here? Because it could go opposite of my prediction before heading in the right direction.

Perhaps there's no great system and it needs to be done manually.

 

[gaussian]

It seems counter-intuitive but on a longer-than-swing-trade trade you're bumping against buy and hold type situations anyway. Why run a stop at all? A far out stop will probably get blown through in a black swan (the situation that would cause you to sudden evaporate that cash without noticing). Any smaller losses you'd see just monitoring it.

In the black swan situation your stop will get blown out and you'll get dicked on execution anyway. In a regular situation, the slow decent to your stop level will probably have you getting out earlier. I'm normally an advocate for running stops but I'm not sure of their practicality here.

 

[FTDK]

On trades that are longer than swing trades, but not intended to be buy-and-hold...

Perhaps I plan to hold for 2 weeks or even several months before I think my predictions will materialize.

How to set stops here? Because it could go opposite of my prediction before heading in the right direction.

Perhaps there's no great system and it needs to be done manually.

Your stop should be at the level where you realize or get confirmation you were wrong. Move on to the next trade.

Where this level should be all depends on your strategy and will be unique to your strategy, just like your entry criteria are unique to your strategy. There is no one correct way.

 

[hhiusa]

Stops assume you have low confidence in where the market is going, volatile swings or not. Quip back all day long; I don't really care.

 

[dozu888]

buy the fcking qqq and NEVER use a stop!

this is a massive shake and scoop operation.

dont you see, a sea of green candles while the price went down.

 

[They]

buy the fcking qqq and NEVER use a stop!

this is a massive shake and scoop operation.

dont you see, a sea of green candles while the price went down.

As a long term investor why not just tell everyone on ET your averaged in price, that way they can either root for you or empathize with you?

As one of the principle QQQ Fanboyz I am not sure why you didn't get the latest memo from the ProBoyz, they said not to buy any QQQ this coming week because the market is going to shit itself after getting gut punched being that the stimulus numbers are out but USA death tolls are rising - upside known - downside unknown.

They said the shake will end towards the end of April so don't pull out your index pooper scooper just yet.

Cheers

 

[dozu888]

As a long term investor why not just tell everyone on ET your averaged in price, that way they can either root for you or empathize with you?

As one of the principle QQQ Fanboyz I am not sure why you didn't get the latest memo from the ProBoyz, they said not to buy any QQQ this coming week because the market is going to shit itself after getting gut punched being that the stimulus numbers are out but USA death tolls are rising - upside known - downside unknown.

They said the shake will end towards the end of April so don't pull out your index pooper scooper just yet.

Cheers

I am gonna start to ignore more idiots like these.

 

[farmerjohn1324]

As a long term investor why not just tell everyone on ET your averaged in price, that way they can either root for you or empathize with you?

As one of the principle QQQ Fanboyz I am not sure why you didn't get the latest memo from the ProBoyz, they said not to buy any QQQ this coming week because the market is going to shit itself after getting gut punched being that the stimulus numbers are out but USA death tolls are rising - upside known - downside unknown.

They said the shake will end towards the end of April so don't pull out your index pooper scooper just yet.

Cheers

Agreed...

The stimulus is priced in. The virus can't be priced in because we don't know the extent of it yet.

And I honestly don't think the stimulus will even do that much. $1200 doesn't go far.

A time like this makes it seem like free healthcare would be good. People are hesitant to go to doctor because of the cost. People will run out of money to buy hand sanitizer, etc.

 

[TommyR]

the knock out feature of the stop would obviously reduce the value of the trade. this needs to be considered along side the risk management benefits.

 

[Handle123]

On trades that are longer than swing trades, but not intended to be buy-and-hold...

Perhaps I plan to hold for 2 weeks or even several months before I think my predictions will materialize.

How to set stops here? Because it could go opposite of my prediction before heading in the right direction.

Perhaps there's no great system and it needs to be done manually.

Have it all on automation as a way to stop mucking it up, stay will system traded decades, I have used same concepts 28 years. The opening position shows greatest "mean" losses, back test best or longest number of days to be at risk, so when system reaches so many days, if profitable, stop loss goes to breakeven plus little, if at a loss, new target is better than got in. Once at breakeven plus, use zero trailing stops unless price patterns show time for retracement or change of trend. System uses hedges as it is often very early, like the Indexes, continue to be short futures, system staying short, hedged all long dividend paying stocks.
Have found trailing stops for swing or longer term often produces fake moves, once at "BE+1" stops, need reasons to change it.