stop loss determination

Put the R/R money management criteria into your stock scan as well. For example, GOOG and NOC recently had about the same rise/risk ratio when trending. Look at the charts from far away and you'll see what I mean.
 
Quote from 40yotrader:


One area of research you might want to check is entry size. If you don't do all in at once it can have a big difference in your trading.
I found if I go in partially initially, and then after a fixed period adding more if the position is profitable, the overall profits went up, the time between equity highs went down, the drawdown increased, and the sharpe ratio went down. If I did partial entry at first and then adding if the stop hasn't been hit, but the position is underwater then adding to the position gave lower overall profits, higher time between equity highs, lower drawdowns, and increased sharpe ratio.

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Just out of curiosity, what is your "fixed period"? It sounds like a measurement of time, if so, I imagine you would have to pre-determine the expected time frame of a the trade? if it is a function of price, i could see that. Intersting stuff though, please elaborate if you can/willing.
 
Has anyone here at ET found themselves cancelling a stop when a market is moving towards it or moving the stop away from the market? If so, did these trades become profitable in general or was this the beginning of the big mistake trade--
 
Quote from Buy1Sell2:

Does anyone here use only a catastrophic stop and has that stop been hit before?
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WTF? Why are you resurrecting all of your old threads?

Did that last line of coke trigger a full-blown narcissistic personality disorder?
 
The trading plan must as we all know include money management to keep the loosing streak manageable.

There is one problem though, the mind can play tricks on us, both emotionally and on the ego level. One thing is for sure, letting the mind take control of the so important aspect of manage the trading rules, we are in for a disaster. The rules have to be predefined and set up in advanced so when it comes to the trading session we are prepared and at ease and can pay full attention to do what we are good at, trade!

Leave the management of position sizing, stop levels, exit points to the money management software, nothing we should concentrate on while trading. Most brokers have instrument based money management but not when it comes to the trading account itself.

I recommend, watch the video below, it explain how to protect our trading accounts, how to keep the profit and minimize the loss.

Click here to watch the video
 
Buy1Sell2 said:
How many at ET set their stop loss according to the charts/market and how many set it according to their account balance? What is your particular preference?
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I use mental stops on timeframes under five minutes, reason not hard stops is I am reading the Dom volume(which some platforms do have volume controls before sending market orders), especially during lunch when volume is often light(lunch time I use 50% more risk cause of volume being so light), I look at any stop to be catastrophic as I would prefer to get out before this area. I use. I learn by good trades, so I will test over 1,000 good trades, taking the mean of 900 trades finding how far the trade went against position to use as stop area. My R:R is always the same in timeframes under five minutes except during lunch when risk is greater than reward.

Buy1Sell2 said:
Do you skip trades then that aren't within budget and if so, is that a difficult decision especially when you feel strongly about the potential?
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Has nothing to do with budget, often times when one minute bar is too long in range, they generally retrace, so let's say I just want to risk 2.00 pts, I will wait for breakout of that big range bar or if I be entering on close, wait for retrace that 1.50 points from high of that bar for entry so my risk is two ticks above that high. But if the price continues down to whatever target I had in mind, I cancel short order. I often like waiting for a breakout but wait for the small retrace right after to get in 2-4 ticks better or if DOM is showing breakout was bull/bear trap and not take trade at all.
 
The former. If everyone set their stops according to account balance then I would have a stop which implied an average holding period of a few seconds, and the multi billion $ HF I used to work for would have stops which were only triggered every few hundred years.

Great post by Artful Dodger.

Also worth noting that % of your account at risk per trade should depend on (a) risk appetite, (b) expected Sharpe Ratio and skew of system, (c) typical holding period, (d) average number of bets in place, (e) typical correlation between bets, (f) access to leverage, (f) likelihood and size of CHF type gap.

1% on each bet might be way too much, or nowhere near enough.

How many at ET set their stop loss according to the charts/market and how many set it according to their account balance? What is your particular preference?
 
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