Stop Losses are for Losers

[Spectra]

Quote from chewbacca:

pro traders don't blow up

And the ones that do happen to commit suicide

Cajun

 

[limitdown]

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.

it certainly helps to qualify that statement to the vehicle of choice...

now if you were talking mark to market futures trading, where intraday movement can wipe out your account and leave you owing the firm, then your arguement needs to be tested in real time and then come back and report your findings,,,

almost certain that you will curse your own words!

however, if you were discussing equities, where you actually own something, instead of all the various forms of derivatives (options, futures, options on futures, bonds, debt instruments (swaps, etc.) and some other exotics) then your intial claims do have their basis in fact.....

however,

if you need a bathroom break, a lunch break, a tele break, a check the printer break, then stop losses allows you to take up your seat on the trading desk after the break, otherwise, they will be dusting off the chair and closing what's left of your account and getting someone else to sit there because volitility ensures that naked (unprotected) positions have some sort of cap on market risk, either through options on the underlying index or equity or through some other hedge, but to just be short, say GOOG, when it does one of its +$35 point moves is sheer stupidity, without having some sort of cap or stop loss in place....

 

[Spectra]

Here is a short video form Alex on the subject of trailing a profit
stop. It's good to be able to trail up a stop without having a
specific target in mind. This way you can catch some huge moves on
trending days. Click on the link below to watch this video.

VIDEO LINK: http://www.puretick.com/video/trail

 

[synchro]

Take a look at July 08 Copper. See attached file. It's May 5th 8:00am before the pit started trading.

Not sure what that is, but looks like bunch of stops placed just beyond the copper all-time high all got tripped with the shorts' faces ripped off.

 

[limitdown]

Quote from Spectra:

Here is a short video form Alex on the subject of trailing a profit
stop. It's good to be able to trail up a stop without having a
specific target in mind. This way you can catch some huge moves on
trending days. Click on the link below to watch this video.

VIDEO LINK: http://www.puretick.com/video/trail

I would like one of those trail accounts!

then I could try out one of those stategies on that TRAIL account

 

[Elite Loser]

don't use stop losses, use stop profits.

 

[Charly]

Quote from Cator:

I think it is a bit extreme to say stops are for loosers,,,
there should be a strategy for each situation,,,
for instance,, I have a system that doesnot require stops (wiew sample in www.colective2.com/go/catordow)
##########################################

Rafael

this link does not seem to work - apart
from the missing 2nd. "l".
There is a CatorFork - thats all

 

[Spectra]

Quote from limitdown:

I would like one of those trail accounts!

then I could try out one of those stategies on that TRAIL account

Pro traders don't use spell check limitdown! Not my strong point

Geoff / Cajun

 

[Epiphany]

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

If stop losses don't work for you - then don't use them. Why are you trying to be an 'authority figure' proclaiming that stop losses are for losers?

Pathetic

 

[Epiphany]

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.

Knowledge does not come out of thin-air. Setting tight-stops requires you to have some knowledge of future market behavior (not necessarily pure prediction but at least some guestimate of probabilities)

Obviously setting tight-stops with no knowledge - just causes you to get stopped out repeatedly and bleed to death.

There is no 'free lunch.'