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Stop Using Stop Losses
- Thread starter oldtime
- Start date
Quote from oldtime:
no, I can't beleive there are more people like you, I think you are the only one
Yeah tell me about it. People like me. People who are upset that are tax dollars are going to a FX traders who martingale into losing positions without using stops. Yeah, the nerve of people like me.
Quote from the1:
Stops are grossly misunderstood. Most traders think if you have a 4 point target and a 2 point loss your risk/reward is 2:1. Nothing could be farther from the truth. .... It comes down to relative proximity so a 4 pt target with a 2 pt stop absolutely does not offer you a risk/reward of 2:1.
Um, yes, it does.
Quote from Maverick74:
Yeah tell me about it. People like me. People who are upset that are tax dollars are going to a FX traders who martingale into losing positions without using stops. Yeah, the nerve of people like me.
Correct me if I am wrong, but isn't that what trading is all about? We use clever schemes to steal money from others, money we didn't earn. In fact, only a tiny percentage of the money actually traded is in fact money earned through real labour.
A little bit of a double standard to be critical of Oldtime, don't you think Maverick?
Quote from the1:
Most traders think if you have a 4 point target and a 2 point loss your risk/reward is 2:1. Nothing could be farther from the truth.
(Presuming u simply made a semantics error and meant to say "reward/risk" is 2:1)
Really? So then what is the reward/risk under this scenario? Surely if u say it isn't 2:1, u must know what it is then? Conversely and even better yet-- define what a 2:1 reward/risk looks like based target/stop...?
In a random environment how could one know which will occur first or even if the 4 point move will occur at all.
One can't... every trade is unique in and of itself... regardless of what that same setup did the previous time or what probabilities say-- uncertainty exists on every trade. However this fact is a moot point... it has nothing to do whatsoever with risk/reward calculation.
And then there's the frequency of which way the market will go.
What's your point?
Also, since you have a 2 point stop, relative to a 4 point target isn't it easy to realize the 2 point stop will get hit more frequently than the 4 point target? It comes down to relative proximity...
Proximity itself has nothing whatsoever to do with it. Probabilities based on the setup will dictate what has a higher chance of occurring-- if an edge exists, over a statistically meaningful sample size the 2 point stop will get hit LESS frequently. Conversely however that stop loss will indeed hit more frequently if trading a low probability set up.
...so a 4 pt target with a 2 pt stop absolutely does not offer you a risk/reward of 2:1
Correct-- based on "risk/reward" it is 1:2.
Stops are grossly misunderstood...
Based on your understanding... I'd say that's quite true...
Quote from SimpleTrades:
Correct me if I am wrong, but isn't that what trading is all about? We use clever schemes to steal money from others, money we didn't earn. In fact, only a tiny percentage of the money actually traded is in fact money earned through real labour.
A little bit of a double standard to be critical of Oldtime, don't you think Maverick?
Oh brother...
Always one in every crowd...
Quote from SimpleTrades:
Correct me if I am wrong, but isn't that what trading is all about? We use clever schemes to steal money from others, money we didn't earn. In fact, only a tiny percentage of the money actually traded is in fact money earned through real labour.
A little bit of a double standard to be critical of Oldtime, don't you think Maverick?
Not at all. Trading is about accountability. It's the core of what trading is. Nobody should be using tax dollars to gamble on FX. I have no issues with providing welfare for people. People who are hungry and truly in need. But when people come to the government begging for money so they can waste it in the FX market, that's a different story. See, one they blow that money they are going to run to the government and ask for more and then I look like an asshole just because I want to cut this guy off. I'm the bad guy because I'm the bartender not willing to serve a drunk another drink.
This guy should be ashamed of himself. The money that he is getting is not going to someone else who may be more deserving.
Quote from riffrafffpatrol:
Oh brother...
Always one in every crowd...
Ahhhh, I see, so you're one of those people who thinks they you are doing some great service to the planet by trading. Let's be honest people, this act of trading that we are all doing isn't something grand and wonderful. We aren't creating anything, inventing anything, saving anything. We are using clever means to take money out of another persion's hands. Really not much different from the guy who plays poor and takes money out of the governments hands through welfare.
I'm not suggesting we shouldn't trade, but let's be honest about what we are all actually doing. Well.... atleast those of you who are actually trading a real account with real money.
I would also like to add that they system decides how much you receive through welfare. If you choose to live on less than what you are given, you should be free to spend the difference in any way you want.
Quote from SimpleTrades:
I would also like to add that they system decides how much you receive through welfare. If you choose to live on less than what you are given, you should be free to spend the difference in any way you want.
Are you aware that this country is 16 trillion in debt? And what you are forgetting is, regardless of what this guy does with his welfare money, if he is getting it, someone else isn't. I imagine the reason this guy is on welfare is because he blew it trading. So now the taxpayers have to support him? Come on dude. Get real.