The Evolution of an E-mini Trader

Tremendous advice, I completely agree and this is why I like to suggest doing some testing like you suggested because a trader may be on the right track and just not getting the right entries or not letting things play out. Many traders are so loss adverse that they cut of the nose to spite the face.

I like to say " dont balme your stop on your entry."

AllenZ
 
Huios,

Sorry, I thought you were making a joke. I understand that you only want to cut the trades that go against you, but my point is a substantial number of them will reverse and go in your favor eventually. That's why you need to have an idea of the distribution of your adverse moves.
 
Max Adverse Excursion is probably one of the better stats out there and I think it is worth the effort...Getting beyond the "noise"range of both one's one trading style and the markets, I think, is the key to finding the bigger winners...

Also, by trying to simply cut the loss threshold down to nearly 0, that kind of ignores the simple fact that the volatility on the time/price charts you are entering on is variable...It is very difficult to just make "blanket" rules for how many points you will allow yourself for a loss
 
AAA - not a problem.

Actually, this brings up something I've tried to hash out earlier. Does one cut the loss, and re-enter if the trade is still there; or hold on, take larger losses when wrong, but have fewer trades actually go against you? Or something like that.

I think the MAE will tell me alot, when I get it done. Reading with one eye, watching with the other!!!
 
Originally posted by Huios


Actually, this brings up something I've tried to hash out earlier. Does one cut the loss, and re-enter if the trade is still there; or hold on, take larger losses when wrong, but have fewer trades actually go against you? Or something like that.
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I think it sounds good to say take the quick loss and then reenter if conditions warrant, but in practice I find it hard to do. I do believe larger stops are the better way to trade, but that does not mean you sit there and wait everytime for your stop to get hit. Plenty of times you will see the entry conditions fail right away, and I would say get out then, don't hang around. But that requires a fair amount of experience and knowledge about your trading methodology.

Let's say your method is to buy any large range 5 minute bar if you are above a moving average. If the very next bar is a complete reversal bar, it's probably wise to get out, even though your stop is not yet hit. Teh market is telling you the entry condition failed.
 
Originally posted by AAAintheBeltway


I think it sounds good to say take the quick loss and then reenter if conditions warrant, but in practice I find it hard to do. I do believe larger stops are the better way to trade, but that does not mean you sit there and wait everytime for your stop to get hit. Plenty of times you will see the entry conditions fail right away, and I would say get out then, don't hang around. But that requires a fair amount of experience and knowledge about your trading methodology.

Let's say your method is to buy any large range 5 minute bar if you are above a moving average. If the very next bar is a complete reversal bar, it's probably wise to get out, even though your stop is not yet hit. Teh market is telling you the entry condition failed.
More...

yes, that is a good point...You do not want to passively take losses, like watching the market run towards your stop and then allowing it to hit...Like you said, if the entry conditions fail get out...But, that is also the advantage of trading multiple contracts, you can amend the get out to "size down" and then you have less exposure to the possibility of adverse movement...On the flipside, so long as the first profit target is greater than the first stop out level, it works well
 
Instead of convincing Huios to make his stops larger why not work on his entry. With the right entry you don't need a bigger stop. With bigger stops comes bigger losses, with bigger losses comes no bank.

Good trading either way.
 
Dizzyspell,

My advice to Huios was to have an idea how far the typical trade gyrates around before you decide to use a particular stop. One of the most important things to learn is you can't control your losses with stops. You may control how much you lose per trade, but the important number is your overall P/L. It is a fallacy to think you can lower your TOTAL losses by using a tight stop.
 
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