The hard road to consistency

Quote from riffrafffpatrol:

oldtime-- think about what you are saying. If "probably' is truly the scenario in the potential trade relative to being stopped out... then you shouldn't be taking the trade in the first place. I'm not trying to argue with you or be difficult... I'm just trying to reason with you.

Sit on your hands until the best of the best setups present itself. This means the probabilities of getting stopped out should be lower... not higher. I have no problem entering in a trade with a "tight stop" if the probabilities indicate the likelihood of price going for you vs against you is high.

But you do NOT want to have the mentality that you will probably get stopped out. You DO however want to realize that regardless of the probabilites, uncertainty exists in every trade. This is necessary so if you do get stopped out, there is not mental anguish that follows. If there is you are admitting you didn't truly accept the risk of the trade in the first place.

As for the mechanics of a stop-- you do want to make sure that the normal volatility of the instrument is taken into consideration. Widening a stop could be necessary if one is getting stopped out often due to a conflict with the volatility relative to the room you are giving a trade to work.
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ok, you do it your way, I'll do it my way. Calm uses very tight stops, tighter than what I would be comfortable with. All I'm saying is when you are getting stopped out all the time, which he is, the very worst thing you can do is widen the stops. Better to tighten them up, since you are probably going to get stopped out anyway.
 
it's all math, and the only thing for certain right now is, you put it on, you get stopped out, so why not bet on that?

And the best way to improve on that bet is to tighten the stop.

And you might as well increase a little size just in case you are wrong.
 
Quote from oldtime:

ok, you do it your way, I'll do it my way. Calm uses very tight stops, tighter than what I would be comfortable with. All I'm saying is when you are getting stopped out all the time, which he is, the very worst thing you can do is widen the stops. Better to tighten them up, since you are probably going to get stopped out anyway.
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OK oldtime... humor me:

Why do you suppose he is getting stopped out all the time? What are some reasonable explanations?
 
Quote from riffrafffpatrol:

As for the mechanics of a stop-- you do want to make sure that the normal volatility of the instrument is taken into consideration. Widening a stop could be necessary if one is getting stopped out often due to a conflict with the volatility relative to the room you are giving a trade to work.
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I will buy that for a dollar.
 
Quote from riffrafffpatrol:

OK oldtime... humor me:

Why do you suppose he is getting stopped out all the time? What are some reasonable explanations?
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there are times when the market isn't going anywhere until every stop is hit, wide, medium narrow or tight. It will just bounce around until it hits every trader who has a stop in. Doesn't matter where that stop is. The winner of the losers is the guy with the tightest stop.

After that stops really hurt you.
 
Quote from oldtime:

there are times when the market isn't going anywhere until every stop is hit, wide, medium narrow or tight. It will just bounce around until it hits every trader who has a stop in. Doesn't matter where that stop is. The winner of the losers is the guy with the tightest stop.

After that stops really hurt you.
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Oldtime,
Let's say you have a long position and you didn't put a hard stop in place. Euro drops 300 pips in a day due to a very bad news from Greece or Portugal. If you decide to close the position it means that you have just executed a mental stop to protect your capital. If you don't close...well it might not come back for months...
Maybe you prefer to adjust your position somehow ?
 
Quote from riffrafffpatrol:

Camel,

ALWAYS have a daily loss limit.

If you hit it... you NEED to be done for the day.

Emotions are too strong and will negatively impact your thought process if you continue to trade without a max limit.

Tomorrow is another day-- you need to clear your mind and walk away-- live for another day.

Also-- try and avoid overtrading. Constant in and out is not the way to do it... solid setups do NOT occur constantly.... u MUST be patient and wait for the right setups.

As for your stop loss distance-- the stop location needs to make sense on the chart at the point you are proven wrong.. do not just "tighten" the stop for the sake of tightening it so you can increase your size. This is defeating the purpose of high probability trading... you could be exiting at the exact point on the chart that indicates a high probability of reversal. If you want to do a tight stop-- the way you do it is to identify the location where you are proven wrong FIRST before entering a trade... then WAIT until price gets closer to this level than you wouldve previously for entry. Problem with this is you will miss many setups as price will turn well before the tight entry location. The best rule of thumb is simply position size for max loss EACH AND EVERY TRADE based on your desired entry location and distance from stop loss.

Solid risk management is what will keep you in the game. It is often the most misunderstood and ignored part of trading... yet above all the most important. Anyone who tells you otherwise is giving reckless advice.

Good luck brotha.
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Thanks. This is what I am trying to do. Risk management above all . Simple but not so easy...
 
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