Stop Losses are for Losers

[Cocaine]

You are joking right?

Quote from Mathemagician:

I think you meant to say "Stop Losses are for Loosers"

M

 

[Mathemagician]

Quote from Cocaine:

You are joking right?

Yes, genious.

M

 

[MandelbrotSet]

Quote from syswizard:

OMIGOSH SURF - this is so precious....and absolutely correct!
I traded a sim e-mini account for 6 weeks, thinking it would be a breeze, given my incredible stop loss discipline.
You know what ?
I lost on 8 out of 10 trades...Yep: 20% win ratio.
Reason: MY ENTRIES SUCKED....HUGELY.
NO WAY you can be profitable with that kind of performance.
Yet my PREDEFINED stop losses were carefully calculated....and a bit on the conservative side.
Bottomline: stops are best set, AFTER the trade has been working for a while. Especially in the e-mini futures arena, the stop-taking engineers are always fast at work...to take your money !!
SET STOPS WITH INTELLIGENCE ! Know when to say "WHEN" !
Saying : I'm only going to risk $200 on this trade is absolutely dumb....it has nothing to do with support/resistance levels or other technical factors.

There's a direct correlation between your "bad entries" and your stops being hit so often.

If they had been "good entries", then your stops would not have been hit nearly as much.

So Stops are good for protecting your capital, when you make a wrong or "bad entry". Not everyone is going to nail every entry all of the time, right?
***
Electric Savant actually started a thread along these lines where he tried to determine how often he could lose ... something about losing to win

 

[doli]

I read somewhere, today, that GS removed GOOG from one of their indices/holdings, because it had gone down enough -- about 14% -- to hit their stop loss!

Are GS loosers?

 

[rallymode]

Quote from marketsurfer:

one of the best posts ever on elite. 100% accurate. in addition, there are studies that indicate that stop losses are counterproductive ,due to inherent volatility and fluctuation, but they are ignored due to above reasons

the market machine ie brokers, et al push the concept since it causes more frequent trading or churn leading to more money in the market machine's pocket.

very nice,


surf

Spoken like a true paper trader. Perhaps you should stick to breaking out news stories and refrain from posting comments that pertain to real trading.

 

[chewbacca]

Quote from SethArb:

gosh ... so anyone who was long from nasdaq 5000

or dow 14000 and who did not

a. use stop loss

b. or some other way to limit their loss

and is still "holding the bag" on their position

or has a "paper bag" over their head and ignores
the "RED in their P+L " if indeed they have not been
liquidated by their broker already ...

they are winners ?

like it said you have to trade the trend.........that market (1994-2003) provided plenty of opportunities to get long on pullbacks on the way up and AFTER the trend changed provided plenty of opportunities to get short on the way down


a recent example......just look at how many suckers got liquidated at 1275 on the s&p......had they waited only ten days they could've not only gotten out their longs at 1400 (10% HIGHER) but they could've reversed and gotten short.

 

[ProfitTakgFool]

My trading improved 1000-fold when I stopped using stops. Now I start very small and if the noise presents greater opportunity I add to it. If the trade isn't going to work it isn't going to work and I self liquidate. Not using stops shouldn't be misinterpreted as not managing risk, however. I manage risk but I take control of it. I don't leave it to the market at some arbitrary number.

Quote from chewbacca:

seriously the people that tend to use stop losses are the people that:

- are undiversified; they put all their eggs in one basket hence they want to protect their basket

- over leveraged; to the point where they can incur large losses from the noise of the market

- fight the trend; thus they need "protection"



what you should do:

trade the trend and only buy on long opportunities and only sell to enter short opportunities

diversify

and never bet too large right from the start - give the position some time



now granted every trader has blown up so everytrader mistakenly believes had he used stops he wouldn't have blown up.....but that is wrong because the only way to really blow up isn't by not using stops.........its by fighting the trend + being overleveraged

 

[wareco]

Quote from marketsurfer:

one of the best posts ever on elite. 100% accurate. in addition, there are studies that indicate that stop losses are counterproductive ,due to inherent volatility and fluctuation, but they are ignored due to above reasons

the market machine ie brokers, et al push the concept since it causes more frequent trading or churn leading to more money in the market machine's pocket.

very nice,


surf

So, I assume that if one were to search your prior posts no mention of you using stops would be found. Is that right?

 

[marketsurfer]

Quote from MandelbrotSet:


***
Electric Savant actually started a thread along these lines where he tried to determine how often he could lose ... something about losing to win

yes, lose to win. betcha you can't do it:

http://www.fxclub.com/contest/


surf

 

[marketsurfer]

Quote from ProfitTakgFool:

My trading improved 1000-fold when I stopped using stops. Now I start very small and if the noise presents greater opportunity I add to it. If the trade isn't going to work it isn't going to work and I self liquidate. Not using stops shouldn't be misinterpreted as not managing risk, however. I manage risk but I take control of it. I don't leave it to the market at some arbitrary number.

exactly. well stated.

surf