Quote from volente_00:
All a STOP does is tell you when you were WRONG with zero emotional bias. The market is always right. By not using any stop at all you are basically admitting that you can not handle the feeling of being wrong. This tells me you need to work on the emotional aspect of trading before tinkering with other factors. I suggest you read this book.
http://search.barnesandnoble.com/booksearch/isbnInquiry.asp?z=y&isbn=0132157578&itm=1
As far as doing it, try it and see how it works for you. But please at least enter some kind such as 10 ticks away or so, because although I was not trading ES at the time, I have heard stories of those who were when it jumped 30+ points in under a minute when the surprise rate hikes went on.
"Virtually all traders use hard stops. Very few traders employ my entry/exit methodology -- certainly not exactly as I do, since it is my own, and is, therefore, unique to me and my own peculiar way of thinking as is my thumbprint and my eyeglass prescription. "
Could it be that those who do not use hard stops are out of capital to trade ?
Thanks for this as well. Yes, I have read that book. It's excellent. And while I don't deny that I am human and have emotions, I also have reason to believe that I have a reasonably highly developed sense of self-knowledge, and I do make it a practice not to trade if I suspect my emotions might get the best of me.
But, again, thanks for the reminder.
Y'know, I'm losing interest in the discussion on stops because I see something more interesting at work here -- namely, the compulsion to jump to a conclusion without teasing out even rudimentary data points upon which to formulate questions that might lead to answers upon which conclusions -- hypotheses, really -- might be drawn. In this brief thread, I've seen it come up at least three times, from risktaker, bitstream, and now from another ET veteran whose posts offer much -- you.
For example, in your first paragraph, you state:
By not using any stop at all you are basically admitting that you can not handle the feeling of being wrong.
This might be a defensible hypothesis if you asked, first, whether all my losing trades came as a result of stops being hit. If that were the case -- and then I were to say, "Fine, I'm not going to use stops at all, then" -- you could reasonably deduce that I did have some problems in the admitting-I'm-wrong department.
The fact is, however, that most of my losses came because I pulled the plug before my stop was hit, and in most of those cases, had I not pulled the plug, the stop would have been hit anyway, and THOSE cases were, more often than not, sure-fire big-time losers that never would have recovered -- or would have recovered only after entry signals in the other direction, in which case I would have closed the trade anyway.
Now, given this information, do you still believe I am suggesting that I cannot handle the feeling of being wrong?
Then there's this:
All a STOP does is tell you when you were WRONG with zero emotional bias.
I would agree if we were talking sugar, or some other rolling/trending vehicle. But the chop-socky es? My point is not that stops have protected me from my own inability to admit the errors of my ways, but that they have set me up as target practice, with everyone else, for the stop runs that do not obviate the underlying validity of the pre-existing signal. Implicit in this statement is the contention that I am able to distinguish between a adverse conditions that support the pre-existing signal, and those which invalidate it, with significantly better than even-odds -- a contention which, admittedly, has not been proven.
The market is always right.
I'm sorry to say this, but if I hear that line again, I am going to vomit. If the markets were "always" right, there would be no volatilty, as perfect knowledge would support fair-market equilibrium at all times. That means, of course, there would be no traders and, worst of all, no ET.
The markets are not always right, any more than Mt. St. Helens is always right. The markets, the planets, your geraniums -- they all just are. They exist without thoughts, preferences, emotions...or opinions. I realize this may come off as a "you say potato" exercise in hair-splitting, but I wonder if this "markets are always right" chestnut reenforces a subconscious notion that the markets are some kind of tyrannical god to which we must genuflect, and I wonder if this attitude forces traders into a daily prostration before the tyrant-deity as their resentment builds, hour-by-hour, day-by-day, to pressure-cooker levels.
The result? Well, of course, there's the acid-laced punchbowl of ET. But, at a deeper level, I wonder if this pathology nourishes a tendancy to jump to conclusions that aren't quite warranted. To be "right." After all, everybody deserves to be "right" now and then. And when you're dealing, day-after-day, with that manic-depressive man-child, Mr. Market, that, God help you, is always "right" -- well, damn if you don't have right to be "right," too.
I dunno, just a thought.
Oh, and not to beat the horse to death but you also state:
please at least enter some kind such as 10 ticks away or so, because although I was not trading ES at the time, I have heard stories of those who were when it jumped 30+ points in under a minute when the surprise rate hikes went on.
My opening post on this thread states that I will employ a 10 point "catastrophic" stop to guard against emergencies involving lost connections, etc.
Again, thanks for all your posts. I really mean it. I've learned much from them.