Stops - do you want them?
- Thread starter mizhael
- Start date
Yes I do remember and I had no stops and plenty of margin. Worked out ok for me. Not so ok for other traders.
Mark, not sure who you are, but you always give solid advice. Indeed, everybody uses stops. I think it is best to use a mental stop at the point where the trade is confirmed to be wrong.
I usually set hard stops at the point specified by my strat (if I have one ^^).
However in an ideal world where I know I can control my emotions and be 100% disciplined, I would rather set an "Emergency Stop" several ticks/points away from the Strat Stop (in case s'thing goes totally wrong with my computer/connection/broker platform), and stop out a trade manually if the Strat Stop is hit/about to be hit or whenever my judgment tells me the trade is clearly not turning into a winner (at which point I obviously cancel the Emergency Stop order).
This, I believe, is better in that you don't have yr order in the market and thus avoid M.M.'s screwing around with it (so as to (try to) avoid being stopped at an exact reversal point, and YES this does happen!
No Stop at all? Not with leverage, not with non-infinite funds or luck! Not for me therefore.)
However in an ideal world where I know I can control my emotions and be 100% disciplined, I would rather set an "Emergency Stop" several ticks/points away from the Strat Stop (in case s'thing goes totally wrong with my computer/connection/broker platform), and stop out a trade manually if the Strat Stop is hit/about to be hit or whenever my judgment tells me the trade is clearly not turning into a winner (at which point I obviously cancel the Emergency Stop order).
This, I believe, is better in that you don't have yr order in the market and thus avoid M.M.'s screwing around with it (so as to (try to) avoid being stopped at an exact reversal point, and YES this does happen!
No Stop at all? Not with leverage, not with non-infinite funds or luck! Not for me therefore.
)It is the same thing. If you are in a losing trade and you reduce the position size by half, for example, you are essentially executing a stop order at some average stop price.
If you dress a monkey in a tuxedo, it is still a monkey, isn't it? You can give it any name you want, like Joe, but it is still a monkey.
Stops are helping me to preserve my capital and to me it s one of the most important things. At least it is something I can control easily.
And from my test the quickest I take my loss the better result I have. I am only right about 40/45% of the time but once I catcha trend then I manage to scale in.
I use all sorts of stop. Time based, Channel, Volatility.. etc....
And from my test the quickest I take my loss the better result I have. I am only right about 40/45% of the time but once I catcha trend then I manage to scale in.
I use all sorts of stop. Time based, Channel, Volatility.. etc....
There are three types of stops that I will not use:
1. Hard Stop
Wicks can fly all over the place but all that matters is where the bodies are falling.
2. Break-even Stop
It is like saying,"now that the move has had time to prove its self and is likely going in the direction I thought it was, please take my position from me. Please, don't say thank you *blush* it was my pleasure."
3. Small Profit Stop
If you ask for a small profit then you are likely to get it.
It is better to exit for a whatever gain the moment you feel like moving your stops up.
This is just my experience
Maybe you are not stopped out all of the time
Maybe your break-even stops save you from 60* trends cutting right through your wallet
Maybe you are a scalper and the 3 or 5 pips gains are enough
Who knows...
1. Hard Stop
Wicks can fly all over the place but all that matters is where the bodies are falling.
2. Break-even Stop
It is like saying,"now that the move has had time to prove its self and is likely going in the direction I thought it was, please take my position from me. Please, don't say thank you *blush* it was my pleasure."
3. Small Profit Stop
If you ask for a small profit then you are likely to get it.
It is better to exit for a whatever gain the moment you feel like moving your stops up.
This is just my experience
Maybe you are not stopped out all of the time
Maybe your break-even stops save you from 60* trends cutting right through your wallet
Maybe you are a scalper and the 3 or 5 pips gains are enough
Who knows...
Correct, stops are for people who want their brokers to steal their shares. Professionals should never use stops, becuase you long positions are always hedged without net short positions. And if you want insurance, there is options, using stops just causes you to lose money.