Stop Losses are killing me

[KCalhoun]

I respect both you coaches and do follow your posts with great interests.

Here are some feedbacks from this amateur retail:

I tried hard stop and didn't end well. I tried trailing stop and did better, so +1 for @KCalhoun. But quite often got stopped out way too early. I tried no stop, let it ran and often they were quite disastrous.

So I gave up day and went swing with mental stops. That is way too much work. Now I am back to trying to automate my mental stops.

Pete has a good point re trailing stops often get shaken out too soon, especially for swingtrading. In daytrading they work best on strong trending or midday reversal (but not choppy) days.

Often charts run up nicely, then drop back down, like the letter A. It's frustrating to be in the money for awhile only to give it back because I didn't trail a stop to lock in profits.

Depending on spoos and chart I'm trading, I often use hybrid approach with both hard stop under support and trailing stops, for multiple positions.

 

[bone]

I have to design a trading system that works the best for my clients.

Swing trading is a different animal than day trading.

Many of my clients come to me after getting the living shit beat out of them daytrading and scalping. They are tired of the abuse of getting stacked, flipped, spoofed, crossed, front run, and all the other HF Bot games. So, they come to me typically in a very abused state.

Markets vacillate back and forth between choppy range days and strong trendy days. And there is no technical indicator package or statistical model that will predict in advance these transition states.

Several years ago, I had a client who insisted on using a trailing stop. He put on a one lot Corn Spread in the early Summer, and three days into it his trailing stop got hit and that SL order closed out his Corn Spread for a $200 profit. If he had set his targets using the range modeling technique I had originally taught him - three trading days later it would have been an $800 trade. It was a bitter lesson for him. And it hardened my resolve to really ride my clients hard for "getting too cute for their own good".

There's a line in the movie Bull Durham where the catcher tells the very physically gifted but scatterbrained and naive pitcher: "just throw the ball, meat".

On very rare occasions, I sometimes will get an email or a Skype chat message from an old client who has hit a rough patch. And every time they have changed the trading system or altered the rules set for trade entry and position management. Humans get bored, and humans are innately curious. Sometimes their choices are not an improvement on things.

 

[murray t turtle]

If you are getting stopped out a lot, it is because your stop losses are too tight. You need to adjust it. I swing trade and if my stop losses get hit, my position is automatically, closed. A lot of times that saved me monies. If it goes my way, I just manage my position. You have to check the stockchart each market close to see if your assumptions as to the trend is still intact. If it is, no reason to bailout or panic each time there is a pullback. Assuming your stock is strongly, trending, it is in your interest to ride the trend as long as it lasts.

%%
Good profitable points/smallfill;
even though I use etfs more than stocks. Many profitable investors don't use stops;
but I cant think of a worse way to trade/ not using notebook stop for a trade.
Its true , if one puts a stop in with most any broker/ they may tend to hit that stop/LOL. But in fairness; they tend to hit a profitable exit stop also...…………………………………………………………..
I enjoyed trading ES/plenty liquid, not much profit over a period of time
I think it was Mark Cuban that said you look @ what everyone looks @;
hard to make money that way.

 

[KCalhoun]

Markets vacillate back and forth between choppy range days and strong trendy days. And there is no technical indicator package or statistical model that will predict in advance these transition states.

Yes! That's a top problem I've found in 20yrs daytrading. No one size fits all / each unique trading day. Especially tough when trading index-derived instruments like SPY.

There's strong trending vs choppy days; A or V shaped etc

 

[smallfil]

Talking about stop losses, my stop loss on MRNA was hit today and my shares promptly, sold. No biggie, that was a small loss. My other positions overall is positive though, so not sweating it.

 

[savoir]

I had 2 trades today in TZA, a small stop (buy 20.7 sell 20.2) and a big WIN (buy20.41 sell 21.4). Perfect 2:1 risk:reward. If only I'd traded larger size. In this winning trade I tightened trailing stop to 21.4 as it broke over 21.5 because length of pivot run was exactly same as in prior day chart. That's a pro example of pattern daytrading,

Pete, agree re t/s often get shaken out too early; that's why I start wide, then tighten; def not for newbs tho.

Worked great:

View attachment 232250 View attachment 232251

Well, cockadoodadoo, Ken. You made enough to buy some firecrackers for the Fourth. I like the emphatic "That's a pro example of pattern daytrading" in bold. LMAO

 

[KCalhoun]

Well, cockadoodadoo, Ken. You made enough to buy some firecrackers for the Fourth. I like the emphatic "That's a pro example of pattern daytrading" in bold. LMAO

As if that were my only trade today. I usually do 10-40 trades on my active days.

What real money trades with PnL proof did You win with today??? That's what I thought lol.

 

[Sequoia1321]

Lots of insightful replies in this thread. Thanks everyone.

 

[bone]

Lots of insightful replies in this thread. Thanks everyone.

This is a great day for you. This is a positive ! You’ve had to endure some negativity but hopefully you’ve checked yourself and stopped and re-evaluated.

What have you learned?

1. Successful trading systems require a tremendous amount of research, background preparation, and paper testing.

2. Position management makes or breaks traders. The great fallacy that I see are traders that spend 99% of their efforts on trade entry and treat trade management as an afterthought.

There are two big lies in trading:

1. That there is a holy grail, and

2. That optimal trade entry negates the need for position management.

The only “sure” things in trading are illegal.

 

[Sequoia1321]

This is a great day for you. This is a positive ! You’ve had to endure some negativity but hopefully you’ve checked yourself and stopped and re-evaluated.

What have you learned?

1. Successful trading systems require a tremendous amount of research, background preparation, and paper testing.

2. Position management makes or breaks traders. The great fallacy that I see are traders that spend 99% of their efforts on trade entry and treat trade management as an afterthought.

There are two big lies in trading:

1. That there is a holy grail, and

2. That optimal trade entry negates the need for position management.

The only “sure” things in trading are illegal.

Sounds very true. I like how you have things quantified so well. Makes a lot of sense. Has been very helpful. Thanks.