Stop losses. Are they the tools of winners or losers?

Quote from peilthetraveler:

I dont use stop losses, but some people freak out on here when i tell them that. They say that the majority of traders lose money, but i notice the majority of traders in here use stop losses... Im wondering if there is any relation. I've only ever met 1 guy that makes 7 figures per year trading and he doesnt use stops either (and its worked well for him the 20 or so years he has been trading) So i just want to get some honest information out of you guys.
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The majority of traders use stops whenever they feel like and and honor stops whenever they feel like it - there is no discipline.
Using stops is not always necessary. If you are only trading 10% of your net worth and you have a portfolio that is extremely diversified then you don't need stops - in that case stops will probably work against you.
 
Quote from Arjun1:

The majority of traders use stops whenever they feel like and and honor stops whenever they feel like it - there is no discipline.
Using stops is not always necessary. If you are only trading 10% of your net worth and you have a portfolio that is extremely diversified then you don't need stops - in that case stops will probably work against you.
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Why on earth would you trade anymore? Are you insane or just an addicted gambler?

Peter Lynch " It's the 10 baggers that make your portfolio a winner" sic
 
I give u some exmaple

XYZ stock IT closed 10.00 yesterday
It was upgraded by Citibank
U buy that stock @ 10.3
Prize drops to 10.00
Market is zero

Beginner sells XYZ pos @ 10.00 because he is "smart" trader using stop-losses.

PRO uses this oppertunity to buy another chunk of stocks @ 10.00 avergaing 10.15

Stock goes back to 10.3 level and PRO sells it taking 0.15 profit.
 
This came to me yesterday from one of my clients, and I quote with his name and instruments of choice redacted per his request:

"Just scored over 50+ ticks per contract on XX on 3 contracts; scaled in and out. I would of have never scored so big without your guidance of using trailing stop."

He is using my model and statistical fitness methodologies to trade flat price futures. I tend to tailor trading systems for each particular client's personality and risk appetite.

http://www.spreadprofessor.com
 
Quote from privador81:

I give u some exmaple

XYZ stock IT closed 10.00 yesterday
It was upgraded by Citibank
U buy that stock @ 10.3
Prize drops to 10.00
Market is zero

Beginner sells XYZ pos @ 10.00 because he is "smart" trader using stop-losses.

PRO uses this oppertunity to buy another chunk of stocks @ 10.00 avergaing 10.15

Stock goes back to 10.3 level and PRO sells it taking 0.15 profit.
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In reality the pro sold it to you at 10.30 and bought it back at 10. And you can bet that if the price had gone up instead of down the pro would have taken a small loss.

There is nothing stopping you from doing the same thing.
 
Quote from deaddog:

How do you know a trade is invalid? Does it hit your stop? Does it go against you to a certain point and not come back?

When a trade goes against you why aren't you exiting and then re-entering at a better price?

Do you add to a trade when it goes in your favor?

Explain what a 911 stop is. Is it placed with the broker or do you keep it in your head?
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I look for elastic action after I add to the initial loser. If I don't get it, I'm probably wrong and take my loss.

A 911 stop is a stop you use at all times to protect yourself from unfortunate events, they are wide, they hurt, but they don't destroy your account.

ESD
 
Quote from deaddog:

In reality the pro sold it to you at 10.30 and bought it back at 10. And you can bet that if the price had gone up instead of down the pro would have taken a small loss.

There is nothing stopping you from doing the same thing.
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Pros are not Gods you know. No one can predict highs and lows with such precision with consistency.

A pro is someone with an edge, superb money management and unbreakable discipline, but definitely not a clairvoyant.

ESD
 
Quote from ES.Dreamer:

Pros are not Gods you know. No one can predict highs and lows with such precision with consistency.
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How do you know that? Are you sure? If you see the orders coming in, know who is buying and selling and at what price, have the capital to move the market, maybe you could predict what will happen in the next few minutes most of the time.


A pro is someone with an edge, superb money management and unbreakable discipline, but definitely not a clairvoyant.

ESD
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With the edge they have the pros don't have to be clairvoyant.
The money management and unbreakable discipline are what keep them in the game when they are wrong.
 
Quote from deaddog:

How do you know that? Are you sure? If you see the orders coming in, know who is buying and selling and at what price, have the capital to move the market, maybe you could predict what will happen in the next few minutes most of the time.



With the edge they have the pros don't have to be clairvoyant.
The money management and unbreakable discipline are what keep them in the game when they are wrong.
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Well, I don't believe in fairy tells, just price action.

ESD
 
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