Stop Losses are for Losers

[HolyGrail]

Quote from marketsurfer:

if you are positioned sized properly, there is no need for hard stops.

hard stops make no sense given the fluid nature of the market.

how many times have you been stopped out, only to see price rebound near or at your stop in your direction? savvy traders, who understand the game, know these facts and that position sizing and money management is key NOT broker/churn shop promoted stop losses.


if you trade FX with dealers hard stops are SUICIDAL.


surf

Absolute assanine post.

If you are always getting stopped out you are placing your stops to close to the noise level.

If you have no clue as to when you are WRONG in your assessment of your trade then you shouldn't be trading.

 

[Cutten]

Quote from chewbacca:

getting stopped out is basically forced liquidation


now think about it why the f--k would you allow yourself to get liquidated - unless your were fighting the trend, overleveraged, and undiversified from the very start........or you had zero confidence in the position from the start and you just put it on for the action.

Times where a stop loss is useful:

1) when the trend ends and then reverses
2) if you are playing a trading range and then the market makes a proper breakout
3) if you are going with a breakout and it then fails
4) when you are trading normally and then some major news hits the market

 

[TradEStar]

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

Exactly why I trade a method called the "accordion" at times as taught to me by AMT4SWA.

 

[TradEStar]

Quote from Cutten:

Times where a stop loss is useful:

1) when the trend ends and then reverses
2) if you are playing a trading range and then the market makes a proper breakout
3) if you are going with a breakout and it then fails
4) when you are trading normally and then some major news hits the market

I also think what you have listed here are the exact criteria which should be considered to end a trade..good or bad.

Excellent points!

 

[FanOfFridays]

Quote from chewbacca:

using stops is completely ILLOGICAL

but... wareco showed us that you were advocating the use of stops a few months ago!

 

[TradStSOX]

The guy, never said NOT to take a loss, which is very different to a stop loss!
Just Arb your way out of a bad trade, he says in the very first post and so correct he is too.
Stop losses are the training wheels, use them if you need them or trade like the pros do, without them... . Mind you, day trading only and most importantly don't let a loser run, correct it immediately.

 

[gaj]

Quote from marketsurfer:

how many times have you been stopped out, only to see price rebound near or at your stop in your direction?

sometimes, that happens.

but what happens far more often is i get stopped out, and if i had stayed in, had a loss MANY times greater than the one i took.

but then again, i don't have my stops where most people do, nor am i a savvy trader.

 

[polpolik]

This is why, marketsurfer, the way you trade and the amount of heat you take on everytrade is ridiculous. You cannot accept the fact you CAN be wrong at times. Of course if you paper trade, you can keep averaging in until you end up with a winner.

So what if you got stopped out and it rebounded? move on and make another trade. If you prefer to be right all the time, then I assure you that you aren't making a lot of money in the market.

Losing is part of making money. Accept it and you'd be better off.

I don't use hard stops but I've used it at times when I need it.

Quote from marketsurfer:


how many times have you been stopped out, only to see price rebound near or at your stop in your direction?
surf

 

[Buy1Sell2]

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

Stops are not effective due to poor positon sizing. Position sizing is much much more important than placing stops.

 

[marketsurfer]

Quote from polpolik:

This is why, marketsurfer, the way you trade and the amount of heat you take on everytrade is ridiculous. You cannot accept the fact you CAN be wrong at times. Of course if you paper trade, you can keep averaging in until you end up with a winner.

So what if you got stopped out and it rebounded? move on and make another trade. If you prefer to be right all the time, then I assure you that you aren't making a lot of money in the market.

Losing is part of making money. Accept it and you'd be better off.

.

what you are suggesting is churning--- stopped out due to market noise, jumping back in, noise stop out again. if your positioned sized properly, one can let the market tell them when to get out instead of noise churning with fixed stops---- just like your BROKER and MARKET INFRASTRUCTURE demands from you.

THINK!

surf