Simple sell rules to protect against disaster in financial markets

[Overnight]

What do you suggest? HODL?
I use stops. You can cherry pick examples where they were detrimental but you can also find examples of where they save you a lot of money.

Here's an example of how stops can be a detriment.

Reminder, these are simple micro-future products. Look at the unrealized P/L swings...

That was from last week, with no stops. Now, if I had a stop at the, say -2K level, it would have been hit. If it was, then I would not have had the reversal back up 1.7K north the next day unless I had entered at the point of the loss. If I had entered at that same level as loss price, I'd still be underwater by the (today) print. By staying in without a SL, my gain/loss has been zero. But the whipsaw is just too insane to manage a position on a day-to-day basis with stops.

And you talk about lessons learned in the "flash crash" (I am guessing you mean the one in 2011 I think?). I kinda' get what you are saying, but when was the last time we had a "flash crash"? Well, 2011! You just have to position yourself where you have enough powder to suffer a sudden drawdown on those rare black swans. This means not overextending yourself.

I am not sure I made sense here. I try. :-(

 

[deaddog]

Here's an example of how stops can be a detriment.


I am not sure I made sense here. I try. :-(

Good try. I got what your saying.

Here is my concern. I don't like to see my capital disappear, even knowing it will come back. I took early retirement in 2000 and watched my nest-egg get cut in half. Not a sleep at night situation. So I figured there had to be a better way.

I came up with a rather simple strategy. Don't hold losers and you'll never have a big loser. If you sell at the first loss you can always buy back when the price is lower. Or buy back when the price is higher. Number 1 priority is to protect capital.

 

[Branos]

You perfectly described everything that can be connected with disaster on the market. I would definitely advice new traders to stay off the idea of trading during catastrophe on the market. It can be caused by many reasons, starting from the disaster with the whole world economic, ending with announcements of particular people, all of us know these people. I think that it's better to wait until the whole situation will be sorted out rather than going short. The best option here is to wait, if you have already seen your assets in negative, then you shouldn't close the positions, you have to wait, because all the situation sometimes are fixed.

 

[Overnight]

Good try. I got what your saying.

Here is my concern. I don't like to see my capital disappear, even knowing it will come back. I took early retirement in 2000 and watched my nest-egg get cut in half. Not a sleep at night situation. So I figured there had to be a better way.

I came up with a rather simple strategy. Don't hold losers and you'll never have a big loser. If you sell at the first loss you can always buy back when the price is lower. Or buy back when the price is higher. Number 1 priority is to protect capital.

You would not like to see those swings over the past few days. Stops would have given those swings "meat", and destroyed the account with losses. Alas.

 

[deaddog]

You would not like to see those swings over the past few days. Stops would have given those swings "meat", and destroyed the account with losses. Alas.

Depend what you are trading. I haven't had a stop hit for a while. Me; it's Canadian stocks.

 

[Overnight]

Depend what you are trading...

Yes, this is true. I have to keep remembering that not everyone is an index fan boi. People out there trade the actual stocks! Ack, foreign reagent entering brain! Get it out of my head, lol!

 

[murray t turtle]

Good try. I got what your saying.

Here is my concern. I don't like to see my capital disappear, even knowing it will come back. I took early retirement in 2000 and watched my nest-egg get cut in half. Not a sleep at night situation. So I figured there had to be a better way.

I came up with a rather simple strategy. Don't hold losers and you'll never have a big loser. If you sell at the first loss you can always buy back when the price is lower. Or buy back when the price is higher. Number 1 priority is to protect capital.

%%
Good points;
that works better than pretending volume is some kind of key to a holy grail/LOL.
STOP also work better when many US broker did low or no commissions.They may make a fortune on bid ask spread/LOL but that'$ life...........................................................................................................+.capital protection+ business expences