Stop Losses are killing me

[tradeking007]

we can now compare the 2 outcomes
adding to loser vs adding to winner
loser ad = max risk was 1400
winner ad max risk was 500
loser add gain max was 2600
winner add gain max was 1400
the clear choice from risk to reward is the adding to a winner. when you add to a winner you capture all the winning points where when adding to a loser you capture all the losing points.

you have a cushion on your winning trade versus reducing the cushion or adding to risk by adding to a loser.

you are up 200 on a trade in sp500 mini on a 1 lot. mkt was at 3000 on entry. now at 3004
3000 long 1 n mkt at 3004 up 200
3004.25 you get filled on a 10 lot buy.
avg price is now 3003.83 you have 2 ticks of breathing room
lets say you add a 4 lot.
avg price is now 3003.4
1 lot avg price is 3002.125
so u have 2 points now or 7 ticks to loss.

you have a cushion before being stopped out.

 

[Sekiyo]

If entry is everything to you then you dont use a stop loss. why would you? you dont want to exit.

Lol

if exit is everything you would use a stop loss because you want to exit.

Lol

you only add n keep adding when you KNOW the mkt will get above your initial entry

Lol

& Welcome !

 

[yc47ib]

I strongly recommend to really read Volpri’s thread in and out before commenting, especially if you are not consistently profitable yet. If you are, good for you.

 

[Saithinin]

For me personally, it’s a very big profit to trade using stop loss.

 

[ironchef]

1 more example
mkt is at 3000 we will buy 4 lots total. 1 every 2 points as the mkt drops. we will then do some exit all scenarios. then we will do the reverse on an add.
3000 buy 1 lot $0
2998 buy 1 2 lots $ - 100
2996 buy 1 3 lots $ - 200
2994 buy 1 4 lots $ - 600
average price is 2997 on 4 lots
we are at 2994 and down 600!
mkt falls to 2900
we are now down 2997-2990 7 pts
7 pts x 4=28×50= $ -1,400 negative
mkt at 2900.

mkt only fell 4 points and we lost 800 dollars!
mkt rallies 8 points to 2998 again.
we are at a profit. 1 pt x4 x50= 200 gain
2999 400 gain
3000 = 600 gain 3pts x4 = 12 x$50= 600 gained on a 10 point reversal. lets remember that ok. 10 points on 4 lots but avg price is 2997
so we made 3 points per lot. or 150 per lot gained but we had a max risk of 1400 on 4 lots which is the mkt at 2900 or 7 points.

if mkt goes to 3010 we made on 4 lots
3010-2997 = 13 ptsx4= $ 2,600 gained.
this is 2600/4= 650 per lot or 13 points per lot

we risked 7 points to gain 13 points per lot

or we risked 1,400 to make 2,600
so 2600/1400= 1.85

13 pts per lot gained. we had a 20 point reversal in the sp500! remember that.
lets do the opposite we buy 1 at 3000 and add 1 every 2 points.
3000 long 1 lot.
2998 long 1 down 100
2996 long 1 down 200
2994 long 1 down 300
mkt drops to 2900
long 1 our max loss here is now 1 lot x50 x 10 points so 500 loss.
mkt starts to reverse as it did before
2998 we are down 100
at 3000 we are even money 0 loss
3002 we buy 1
3000 long
3002 long 2 gain 100
3004 long 3 gain 300
3006 long 4 gain 600
our average price is now long 4 @ 3003
at 3010 we are up 7 points per lot
or 3010-3007=7 ptsx50x4= $ 1,400

wait a second how can this be? lets look at risk to reward now.
max risk was 10 points on 1 lot or 500 dollars.
so in the end of the trade it would look like this.
we risked 500 to make 1400
see you must take the lots out of it and just use total gain and loss!!!

we risked 500 to make 1400
1400/500= 2.8. but we really had little risk of loss of our capital just loss of our current gains.

i would rather lose a paper gain than realize an actual loss wouldnt you!!

In your example:

You scaled up. Your cost base was $3,003. Exited when market went to $3,100, you made $1,400.

You averaged down. Your cost base was $2,997. Exited when the market went to $3,100, you made $2,600.

You said scaling up is better???

 

[tradeking007]

In your example:

You scaled up. Your cost base was $3,003. Exited when market went to $3,100, you made $1,400.

You averaged down. Your cost base was $2,997. Exited when the market went to $3,100, you made $2,600.

You said scaling up is better???

funny you didnt even consider the risk but thats typical if demo account traders

 

[tradeking007]

again. volpri will never tell you or show you when he actually stops adding to a loser or what his max loss is or max position on a trade because he trades a demo acct and will just keep adding until the mkt turns. he also cherry picks his last 2 good entries before the mkt turns to make it look like those were his only entries.

example. mkt is at 3000
i am showing u a strategy in a chart demo or real. i buy 1 every 2 points. so droos from 3000 to 2980. 20 points. i only show u on a chart my last 3 buys at 2980 2982 and 2984. you dont realize or see where i started buying at 3000 even!! i just cut those out!! please dont average down. its terrible advice and press volpri to truly explain how or when he exits a trade at a loss or when he stops adding. no one can just keep adding forever. what a joke

 

[tradeking007]

In your example:

You scaled up. Your cost base was $3,003. Exited when market went to $3,100, you made $1,400.

You averaged down. Your cost base was $2,997. Exited when the market went to $3,100, you made $2,600.

You said scaling up is better???

you needed a 20 point rally to get to 3010 and get those profits when adding to a loser. you only needed a 10 point rally to get 1400 in profit adding to a winner. that is the biggest difference. holding a 4 lot for the entire 20 point move or holding a 1 lot for 10 points and a 2 lot for 8 pts a 3 lot for 6 points and a 4 lot for what 3 or 4 points. thats the risk. the # of lots u have and how many points u must gain. if mkt fell 10 more points from 2990 it would be 2980
1 lot risk is down 1000 dollars
4 lot risk long at 2997 is17 points
17x4lots×50= 3,400 loss

1000 loss versus 3,400 keep thinking adding to losers is smart business. if trading is a business would you keep buying more things to sell that are losing more and more. one news blip and you are toast

 

[virtusa]

In your example:

You scaled up. Your cost base was $3,003. Exited when market went to $3,100, you made $1,400.

You averaged down. Your cost base was $2,997. Exited when the market went to $3,100, you made $2,600.

You said scaling up is better???

chef,

you should compare the profit in relation to the risk, not just in absolute profit numbers.

You should compare the results with taking the same risk.
Let's say you want to risk $1400, that's the risk the loser took by averaging down.
If you would take the other strategy and add when the markets move in your favor, you could, with the risk at $1400 make $3920 profit instead of $2600 (the averaging down result).
The math: 1400/500*1400=3920.

Here is the used data:
loser ad = max risk was 1400
winner ad max risk was 500
loser add gain max was 2600
winner add gain max was 1400

 

[d08]

I traded for years without any stops on my main system. Now I'm using stops, not so much to get better R/R but for psychological reasons, although I'm seeing slightly better returns as well. Covid stocks can easily move 50 or 100% nowadays intraday, that's too much if you're trading sizable positions.
For index stuff, I still go without stops. Have to be mentally prepared for the worst case scenario.