The meaning of risk. What does risk mean to you?

[deaddog]

And that wholly depends on the instrument you are trading. There is no denying that a stop-loss system for instrument A may not work for instrument B.

Why not? A stop loss or as like to refer to it a capital preservation exit or a quick loss prevents you from blowing up your account.

I can't see how the instrument you trade makes any difference. The object is to get you the hell out before you have a chance to lose a bunch more.

 

[Overnight]

Why not? A stop loss or as like to refer to it a capital preservation exit or a quick loss prevents you from blowing up your account.

I can't see how the instrument you trade makes any difference. The object is to get you the hell out before you have a chance to lose a bunch more.

Oh deaddog, deaddog, deaddog. You have so much to learn. Have you never read my journal?

There is more to life than a fucking stop-loss. It all depends upon the instrument you trade, and how you trade it.

I think part of the problem is people think of this shit as putting all their money into a single risk stock on the pink sheets.

Well, yeah, there's a good chance that the trade will go bad.

I think part of the problem is people getting involved with putting all their money in options on stocks, when they have no knowledge about options, or the stock they are buying or selling options on.

I think part of the problem are people who put all their money into forex trading with 500:1, or 1000:1 leverage, without understanding what leverage truly means, and not understanding how Forex works.

Does an individual stock, single stock option, FX pair, commodity or bond have unlimited upside? Nope.

Not Cattle, not any FX pair, not any stock (and thus option) has unlimited upside potential. So you must trade them as such, with STOPS.

Indices do not have this problem, because of how they are designed.

So if you wish to trade an individual stock, it is good to have a stop. Because an individual stock can go to zero. A FX pair can fester in a range way below your entry for a long time. So it is good to have a stop. Gold can have a wicked range, but it will never get out of it's range until it is a MAJOR breakout.

CL is in a range as well that will need a MAJOR breakout to bust out of it's range. But CL has one thing going for it...It is multi-partite. Trading forward contracts on CL is I guess like trading single-stock options with a far-our expiry.

I dunno', getting tired now. My point through all of this was...You do not need to use stops to get out of a loss.

There are myriad other ways to do so without losing your shirt in cash.

 

[deaddog]

I dunno', getting tired now. My point through all of this was...You do not need to use stops to get out of a loss.

There are myriad other ways to do so without losing your shirt in cash.

Couple things. I'm sorry I haven't read your journal. I suppose I should but I'm a procrastinator and keep putting it off. One of these days.



You also missed my point. You don't get out of a loss with a stop, you just keep the loss small and have capital available to put to work when another opportunity presents itself.

I don't care what instrument you trade, if the trade is going against you, you are not optimizing the use of your capital. Sure you can hedge but that's spending money so you don't lose as much. Hold the index as it goes down because it will always come back cause it always has. But what if it doesn't or what if it takes years. It's happened before.

You make money by compounding. Keep it working. A trade that make 100% makes less than 10 trades that make 10% if you compound. Capital tied up in a losing trade ain't working for you. Keeping a loss is like putting your capital on welfare. It's not doing anything and your keeping it.

So how is my being in cash (losing my shirt) any different than you sitting in a losing trade waiting for it to turn around? I can always jump on the next bandwagon and take it for a ride.

 

[Overnight]

...Capital tied up in a losing trade ain't working for you. Keeping a loss is like putting your capital on welfare. It's not doing anything and your keeping it.

So how is my being in cash (losing my shirt) any different than you sitting in a losing trade waiting for it to turn around? I can always jump on the next bandwagon and take it for a ride.

Oy, l know, I know I know. Ug, I keep banging my head on the wall about this. It is what I term the opportunity cost lost.

Yer just gonna' have to read my journal. It's a long read, so grab some spiked eggnog with your mate and snuggle under the covers and have a great ride during the holidays. Whooop!

 

[deaddog]

Yer just gonna' have to read my journal. It's a long read, so grab some spiked eggnog with your mate and snuggle under the covers and have a great ride during the holidays. Whooop!

So I started to skim through the journal. Post 350 I found this

But I would rather be out of the market for a month(s) and wait for a dip to buy into than be IN the market at a top and suffer a month(s)-long drawdown.

Now wouldn't this be a great place to employ a stop loss?

I have said many times before I would rather be in cash while the market went up without me than be in the market when it is going down.

 

[Overnight]

So I started to skim through the journal. Post 350 I found this

Now wouldn't this be a great place to employ a stop loss?

I have said many times before I would rather be in cash while the market went up without me than be in the market when it is going down.

Well, it is the same damned thing!

And by the way...You are "skimming" my journal? FRAK! I have tailored the journal to make sense with multimedia best I can, so if you do not get it, then, well, bite my chode! I'm old, I don't know how else to analogize it!

 

[Nobert]

Paying for something too much when it's worth way less.

Edit : found my own post from the first page and i have no clue what that past me is writing about.

 

[deaddog]

And by the way...You are "skimming" my journal? FRAK! I have tailored the journal to make sense with multimedia best I can, so if you do not get it, then, well, bite my chode! I'm old, I don't know how else to analogize it!

By skimming I meant reading only your posts. Like the markets the rest is noise. As for the multimedia I'm immune to that shit.

It's a worthwhile journal. Good trades posted with the bad, better than most. I appreciate you taking the time to put it together. I try to read everything with an open mind knowing that when I'm posting I'm just putting on paper what I already know, but reading someone else's post I might learn something.

Are you learning from your mistakes? You still seem a little confused as to whether to follow your plan or not. Like Mike say's "Everyone has a plan until they get punched in the face". How much pain will you be able to take when the market corrects.

 

[easymon1]

Stops. Can't live wit 'em, can't live witout 'em. lol
Larry'll catch on in a few more decades too.

 

[pipbeepip]

To date, using a new trading strategy or condition for live trading feels risky to me unless I back-test them on my demo account. Also, trading without using a stop-loss seems to be too risky for me. I would never take that risk.