he would likely make more money and lose less without hard fixed stops... the dynamic nature of the market assures this---tests confirm , particullarly regarding sp eminis....ill try to find the research.
surf
Stop Losses are for Losers
- Thread starter chewbacca
- Start date
he would likely make more money and lose less without hard fixed stops... the dynamic nature of the market assures this---tests confirm , particullarly regarding sp eminis....ill try to find the research.
surf
taking losses with fixed stops is the real key to enrich your broker by 10000 self inflicted cuts.
remember, im not saying not to close positions, but rather use position sizing to test positions and average in to widen your margin of error. remember we are dealing with ebb and flow, not straight line movements.
remember, im not saying not to close positions, but rather use position sizing to test positions and average in to widen your margin of error. remember we are dealing with ebb and flow, not straight line movements.
I think there are two separate conversations going on here:
1. the debate about FIXED, HARD stops
2. the debate about having ANY stops at all, mental or hard
If a trader has the mental discipline to handle mental stops, then OK; but many traders lack the necessary mental discipline.
But if a trader actually thinks that getting out of a position at a loss is necessarily a bad thing, then that kind of trader will not last long trading real money (but can probably make simulated money forever).
Losses are inevitable, as are profits.
He who does not know what he risks, essentially risks all.
1. the debate about FIXED, HARD stops
2. the debate about having ANY stops at all, mental or hard
If a trader has the mental discipline to handle mental stops, then OK; but many traders lack the necessary mental discipline.
But if a trader actually thinks that getting out of a position at a loss is necessarily a bad thing, then that kind of trader will not last long trading real money (but can probably make simulated money forever).
Losses are inevitable, as are profits.
He who does not know what he risks, essentially risks all.
Stop losses are not for losers. They are for losing trades.
I get stopped out on a regular basis in my longer term positon trades but rarely and I mean rarely with a loss. Those stops come intraday when I'm not monitoring their price action.
I make all decisions for those trades (including stop replacement)at the end of the day. I let the market act as my assistant taking me out of a trade with profit when momentum and strength turns against me.
In my history, investor's tend to use hard stops (not a great idea, but understandable), and active traders tend to use alerts if need be. We have programs that flash on any of several hundred stocks in our family portfolio (mostly hedeged of course), and we can then evaluate overall market conditions, the stock, etc. and make a decision at that point.
FWIW,
Don
FWIW,
Don
this is what i do.....I focus less on entry and exit and just try to focus on managing my trade to the best of my ability once i am in...i have mental stops and mental targets which may be overrided depending on what i see...I am in no way a good trader i am just a little guy trying to be a big nut....
no offense my friend but you were totally over leveraged hence your percieved need for stops.
surf
ps. don bright is quite right on this one. well said mr. b.