Stop Losses are for Losers
- Thread starter chewbacca
- Start date
hoping this would come up,taking out that emotion allows u to relax a little, define your risk and trade better, if you are watching the mrkt and get stopped out and it reverses u can get back in,sometimes u avoid a bad ride, sh 35,stopped out at 37 short againa t 41 and ride to 31, larger profit than if u didnt use stop and rode to 41 and back to 31
good example you bring up !
I think, like in most areas of trading, it depends from the traders specific trades,one should go over his past trades to adjust stop settings
No doubt anyone who doesn't really know what he is doing should use a stoploss. But there is an alternative if you use a complete methodology wherein you trade the gyrations of the market (ES,YM,CL,etc) from open to close (buying upmoves, selling downmoves) and take the signals of your system sequentially so that a separate stoploss function is not required.
if your system is that good,and you mentally stop yourself out like a machine,then u dont need them, my trading is full of human error and so are my mental stop processies, (stop losses are for losers) without them my losers would be largerQuote from Cheese:
No doubt anyone who doesn't really know what he is doing should use a stoploss. But there is an alternative if you use a complete methodology wherein you trade the gyrations of the market (ES,YM,CL,etc) from open to close (buying upmoves, selling downmoves) and take the signals of your system sequentially so that a separate stoploss function is not required.
Stops are not for losers, but for people who believe in murphy's law.
"Whatever can go wrong, will go wrong."
What if, during a trade, your internet connectivity fails, or the broker has a hick up, or any of the many other scenarios which prevent you from entering an order, about which you can read almost daily on this board. You could still phone in to the brokers desk, but chances are that you arent the only one haveing this problem, and you will have to wait in line. I always put in at least a disaster stop for this reason.
Maybe longterm traders dont need that, but for daytraders, who typically use leverage, these scenarios have the potential to wipe out an account, and i dont like to take this chance.
"Whatever can go wrong, will go wrong."
What if, during a trade, your internet connectivity fails, or the broker has a hick up, or any of the many other scenarios which prevent you from entering an order, about which you can read almost daily on this board. You could still phone in to the brokers desk, but chances are that you arent the only one haveing this problem, and you will have to wait in line. I always put in at least a disaster stop for this reason.
Maybe longterm traders dont need that, but for daytraders, who typically use leverage, these scenarios have the potential to wipe out an account, and i dont like to take this chance.
Stop losses are not fool proof. They are supposedly designed to prevent catastrophic loss. But when markets get crazy that is exactly when stops don't work either. Only puts offer a guaranteed downside protection.
For example a market can gap open and your stop is not executed at the intended price. Futures markets can stop trading when they open limit down. They can be limit down for several consecutive days at a time. Stops won't help you in that case.
For example a market can gap open and your stop is not executed at the intended price. Futures markets can stop trading when they open limit down. They can be limit down for several consecutive days at a time. Stops won't help you in that case.
buy pullbacks and rarely breakouts in uptrends......and take profits at new highs
sell pullbacks and rarely breakouts in downtrends.......and take profits at new lows
when the trend reverses i lose money....and since i usually enter on pullbacks i don't lose much......and i never average down
i cut my losses everyday.........i do have catastrophic stop losses in place everyday on every trade............but i refuse to get out of a positions just because it goes x amount or x ticks against me.......because that is scared, impatient trading and the surest way to not improve your skills as a trader overtime.
in trading the trend i'm basically fading the possibility of reversals.......and overtime i've become better at idenitying a real reversal from a pullback........even if the trend reverses i'm not going to get out in a panic because i know the market rewards patience and there will be a pullback that will enable me to cut my losses shorter and reverse the position to ride the new trend.
sell pullbacks and rarely breakouts in downtrends.......and take profits at new lows
when the trend reverses i lose money....and since i usually enter on pullbacks i don't lose much......and i never average down
i cut my losses everyday.........i do have catastrophic stop losses in place everyday on every trade............but i refuse to get out of a positions just because it goes x amount or x ticks against me.......because that is scared, impatient trading and the surest way to not improve your skills as a trader overtime.
in trading the trend i'm basically fading the possibility of reversals.......and overtime i've become better at idenitying a real reversal from a pullback........even if the trend reverses i'm not going to get out in a panic because i know the market rewards patience and there will be a pullback that will enable me to cut my losses shorter and reverse the position to ride the new trend.