stop losses are for loooosers

Quote from ForrestGump:

Yes, stops are absolutely essential to bring you back to reality to reassess the market. Agree that stops are arbitrary. In my experience, the more 'logical' they are, the more likely they are to be hit - possibly because of a large number of people reaching the same 'logical' conclusion.


primemover,

The stoploss point has to be decided BEFORE you enter the trade. You will find that a trader's judgement gets biased by his market position and actually becomes quite worthless once the market starts moving against his position.
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forrest,

the key is to remain unbiased. i agree, if one becomes biased after entering a trade, and refuses to take a loss its not good.

it's fixed price stop losses i have found to be damaging. not taking a loss based on market action after entry.

i have found stops based on time are more effective than ones based on fixed predetermined price.
 
I'm going boating after work today. Anyone up for a ride. By the way, there won't be any life jackets on board and we'll stay a random distance from shore. That'll make it more interesting as we'll guess as to whether we'd be able to swim back.
 
Quote from plugger:

I'm going boating after work today. Anyone up for a ride. By the way, there won't be any life jackets on board and we'll stay a random distance from shore. That'll make it more interesting as we'll guess as to whether we'd be able to swim back.
More...
Not bad, plugger. Welcome aboard.
:D
 
Quote from ForrestGump:

"... Agree that stops are arbitrary. In my experience, the more 'logical' they are, the more likely they are to be hit - ..."
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By definition.... if the stop is "more likely to be hit" then its placement has not been more logical.
 
Hi all,

I'm not english mother tongue so sorry in advance for errors.

In my experience I have to agree that stop losses increase total losses of the systems.

Of course it depends on wich type of trading system and wich type of money management rules you are using, but if you are using a short short term system on stocks(not an intraday system) and you risk maximum 3% of the equity, it's better for you not to use stop losses, otherwise stop losses will literally eat all your capital.

This is not in theory, but in my own experience.
 
So, what happens Your profit target is +$ 200 and the trade went -$ 150 against you. Do you hold onto it to get profitable?
 
Quote from plugger:

I'm going boating after work today. Anyone up for a ride. By the way, there won't be any life jackets on board and we'll stay a random distance from shore. That'll make it more interesting as we'll guess as to whether we'd be able to swim back.
More...

Sounds like you're not too confident about your boats sea worthiness or in your captains skill at navigation.
Perhaps you should just stay tied up to the docks.
 
if the future at any one point in time is normally distributed, it doesn't matter whether you have a stop or not - stops shouldn't change your expectancy in such a perfect world.

this is most of the time when everyone in the market is running around doing their own thing and the ticker tape is just spewing out a random walk

but once in a while a horn blows and everyone starts rushing in one direction towards you. academics call this criticality. I call it a mob stampede

whatever it is, the tape starts going relentlessly in one direction. so if you believe tails can be fat on occasion you want to use stops to cut off those fat tails before they have a chance to whack you.
 
Quote from lancillotto:

Hi all,

I'm not english mother tongue so sorry in advance for errors.

In my experience I have to agree that stop losses increase total losses of the systems.

Of course it depends on wich type of trading system and wich type of money management rules you are using, but if you are using a short short term system on stocks(not an intraday system) and you risk maximum 3% of the equity, it's better for you not to use stop losses, otherwise stop losses will literally eat all your capital.

This is not in theory, but in my own experience.
More...


well said, my non english trading brother.

:)
 
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