correct. this is why time stops make more sense.
i'll call you next time i am at cipriannis or felixes--sorry i missed you last time.
stop losses are for loooosers
- Thread starter primemover
- Start date
correct. this is why time stops make more sense.
i'll call you next time i am at cipriannis or felixes--sorry i missed you last time.
You have to have a clear exit strategy when taking a position otherwise you can remain indefinitely in a bad trade.
primeover,
The problem for you may not be the issue of stop/loss but the issue of using fixed stop/loss.
I've discussed this topic several times in the past here at ET and I strongly feel we are at a disadvantage when we apply the same fixed stop to different price action.
Thus, if the price action is different from one trading day to the next...its tough to exploit such on a consistent basis when we are using fixed stops and/or fixed profit targets.
Therefore, we should be using stop/loss or profit targets that are based on the current price action/pattern so that its more suitable for current volatility or current supply/demand.
In other words, your stops today most likely will be different than your stops tomorrow...same with profit targets.
That may be your main trade problem (non-adaptable methodology) if your seeing too often the trade goes your way after being stopped out for a loss or small profit.
Simple solution...not always the best solution...
Improve your entry method.
Complex solution...I feel is the best solution...
Improve your stop/loss method (no fixed stop/loss protection).
Last of all, if you are using fixed stops or fixed profit targets and it works well for you...
Keep doing what works.
Good luck.
NihabaAshi
yes, a clear exit strategy as opposed to fixed price stops.
Ok, when you are new at trading, your stop loss IS a pain.
Sometimes it can eat you alive, BUT that is exactly because you do not understand very well the laws of supply and demand and how the mass of traders tend to think.
Somebody said earlier that if you place a stop loss in a logical position, the market will eat it alive. SUPER TRUE. More than that, stops that end in a 0 figure are as dead as they can be as these levels are sometimes just like magnets.
But after all, the logic of placing a stop lies within your OWN strategy. First, make sure you have a good entry detection technique and you could be as well placing 5 to 10 pip stop losses (very tight imho) and still avoid getting stopped.
And at that stop loss you can even be trading for 20 pips and still have a profit to loss ratio that is to be considered acceptable.
Before the 40s the main cause of people losing money on wall street was because of lack of knowledge, now we blame it on poor money management techniques, and YET those rules are the simplest. MY OPINION: we still lack knowledge.
So conclusion: Stop losses. NECESSARY. Entry techniques. COMPULSORY.
All I know is that stop losses kept me in the market a long time and helped me compound at an acceptable rate that stayed constant and allowed me to increase from time to time, the lot number, as i was sure that i was eventually still going to pull out a minimum amount of pips per month.
Sometimes it can eat you alive, BUT that is exactly because you do not understand very well the laws of supply and demand and how the mass of traders tend to think.
Somebody said earlier that if you place a stop loss in a logical position, the market will eat it alive. SUPER TRUE. More than that, stops that end in a 0 figure are as dead as they can be as these levels are sometimes just like magnets.
But after all, the logic of placing a stop lies within your OWN strategy. First, make sure you have a good entry detection technique and you could be as well placing 5 to 10 pip stop losses (very tight imho) and still avoid getting stopped.
And at that stop loss you can even be trading for 20 pips and still have a profit to loss ratio that is to be considered acceptable.
Before the 40s the main cause of people losing money on wall street was because of lack of knowledge, now we blame it on poor money management techniques, and YET those rules are the simplest. MY OPINION: we still lack knowledge.
So conclusion: Stop losses. NECESSARY. Entry techniques. COMPULSORY.
All I know is that stop losses kept me in the market a long time and helped me compound at an acceptable rate that stayed constant and allowed me to increase from time to time, the lot number, as i was sure that i was eventually still going to pull out a minimum amount of pips per month.
You've asked a similar like question in your prior threads and got solutions including one from me...
However, see my reply to primemover.
NihabaAshi
And still, profit is taken at the exit. A good entry is helpful, but do not underestimate the tools that KEEP you in the trade... And one of those toold is a TRAILING STOP.
ok. stop.
ok. stop.
Quote from Ripley
So, what happens Your profit target is +$ 200 and the trade went -$ 150 against you. Do you hold onto it to get profitable?
------------------
If the question is for me: no I Don't.
I' don't hold onto it get to get profitable. This is the good old BUY AND HOLD strategy, and we know that this strategy isn't for traders.
In the simpliest case I set a max number of days to hold the position.
Let's say that the max days are three.
If within this time period the stock has hit the limit sell order it's all ok, we have a profit, but the stock within this period could badly dip.
In this case there isn't a stop loss.
At the beginning of the fourth day I'll sell the stock and I'll take the loss.
Of course this is not the most profitable sell rule I actually use but it is a good example.
Regards
So, what happens Your profit target is +$ 200 and the trade went -$ 150 against you. Do you hold onto it to get profitable?
------------------
If the question is for me: no I Don't.
I' don't hold onto it get to get profitable. This is the good old BUY AND HOLD strategy, and we know that this strategy isn't for traders.
In the simpliest case I set a max number of days to hold the position.
Let's say that the max days are three.
If within this time period the stock has hit the limit sell order it's all ok, we have a profit, but the stock within this period could badly dip.
In this case there isn't a stop loss.
At the beginning of the fourth day I'll sell the stock and I'll take the loss.
Of course this is not the most profitable sell rule I actually use but it is a good example.
Regards
I've questioned for a while whether or not my stops were way too tight compared to the profit targets I was aiming for, and they most likely are; I mean, why have just a 10 pip stop when your target is 200 or more? But I justify having very tight stops because it forces me to become *extremely* selective in my entries, whereas if I give my self alot more breathing room I will most likely get sloppy. So even though I miss out on many trades, I'm comfortable with my stop-losses because they actually help me improve my timing.
You need complete belief in something before you can execute properly, any hesitation will be exposed by the markets. So if you ever plan on re-implementing stops in the future, convince yourself first that they are absolutely necessary by doing the homework and making sure they fit with how you trade.
You need complete belief in something before you can execute properly, any hesitation will be exposed by the markets. So if you ever plan on re-implementing stops in the future, convince yourself first that they are absolutely necessary by doing the homework and making sure they fit with how you trade.