Tight stops vs. loose stops vs. no stops

S

Scarab

After trading on a live account for a few weeks now, and reading entire forests-worth of books and postings, I am curious about more experienced traders' thoughts on stops.

It seems to me that if you are going to play it safe and use tight stops (approx 10 pips) there is a fairly good chance of that stop being hit before making a profit. Even if I do make money, I would have to risk a fair amount of money to make anything worth bragging about. I am not interested in making just $5 - 10 dollars per trade. It's not worth the risk.

If I use loose stops, I am getting the impression that I must have made some incorrect assumptions if things go against me that much. If I use a 40 pip stop, and am giving $5 per pip, the losses add up quickly. When the negative balance on a trade gets bad enough, I am tempted to get rid of the stop entirely.

I traded a couple days with no stops. One day it paid off, the other I got killed. On one trade, I was $1,200 negative just to end with a $200 profit. Terrible risk management.

If almost everybody loses money trading, then obviously, almost everybody is making some serious errors. I'd appreciate some comments from those of you that make money ($10k/month & up) trading Forex. I trade Euro/USD.

Thanks,
Scarab
 
You need to get my book, "The Perfect Stop".
$99 at amazon.com
Works on ALL commodities, indexes, options, currencies.
Let me know if you can't find it and i'll give you the address where you can mail your check.
Sorry, no money back guarantee.
:D
 
Some setups require large stops while some require small stops.
In other words, know your setup.

good luck
 
Stops are for pussies. Double down on your existing position at the price where you think your stop should be. You're going to lose your original tradin stake anyway. At least die with your boots on.
 
Quote from Scarab:

After trading on a live account for a few weeks now, and reading entire forests-worth of books and postings, I am curious about more experienced traders' thoughts on stops.

It seems to me that if you are going to play it safe and use tight stops (approx 10 pips) there is a fairly good chance of that stop being hit before making a profit. Even if I do make money, I would have to risk a fair amount of money to make anything worth bragging about. I am not interested in making just $5 - 10 dollars per trade. It's not worth the risk.

If I use loose stops, I am getting the impression that I must have made some incorrect assumptions if things go against me that much. If I use a 40 pip stop, and am giving $5 per pip, the losses add up quickly. When the negative balance on a trade gets bad enough, I am tempted to get rid of the stop entirely.

I traded a couple days with no stops. One day it paid off, the other I got killed. On one trade, I was $1,200 negative just to end with a $200 profit. Terrible risk management.

If almost everybody loses money trading, then obviously, almost everybody is making some serious errors. I'd appreciate some comments from those of you that make money ($10k/month & up) trading Forex. I trade Euro/USD.

Thanks,
Scarab
More...

Man, you GOTTA trade with stops. If you don't, it's just a matter of time until they bust you out.

A a minimum, you should buy IndexTrader's book!!
 
Thanks, gnome.
I believe that is the first endorsement of my book so far.
I will ask Barron to put it on the "Books" page of this site, soon.
And I'll funnel 1% of the revenue to you.

:p

Quote from gnome:

Man, you GOTTA trade with stops. If you don't, it's just a matter of time until they bust you out.

A a minimum, you should buy IndexTrader's book!!
More...
 
Quote from IndexTrader:

Thanks, gnome.
I believe that is the first endorsement of my book so far.
I will ask Barron to put it on the "Books" page of this site, soon.
And I'll funnel 1% of the revenue to you.

:p
More...

Not even a whole dang DOLLAR? I get more 'n that shilling for jimmy-hats in the men's room at the corner bar!!
 
[Stops are for pussies. Double down on your existing position at the price where you think your stop should be. You're going to lose your original trading stake anyway. At least die with your boots on.]


What? Are you insane?! 'stops are for pussies'? Doubling down? 'Die with your boots on'? WTF?!

Are you even a trader? I'm hoping that what you posted was tongue in cheek or sarcastic. Stops are integral part of trading and assuring survival. Doubling down is the worst thing you could do.

Assure survival, maximize profits and minimize losses. Use Stops!

-m.o.
 
Well, you're overlooking the fact that millions of newbies will be buying this book.

And I'm already working on my next best seller, "Using 5% stops in Real Estate''. It's taking a while because I'm having trouble filling up the entire book. But the masses are awaitin'.
Have you noticed how many real estate books there are now at Barnes & Noble and Borders? Sure brings back memories of the stock bubble of 2000.


Quote from gnome:

Not even a whole dang DOLLAR? I get more 'n that shilling for jimmy-hats in the men's room at the corner bar!!
More...
 
ok, ok, I get the message. Assuming you are the ones who are actually making money at this, stops are a must. I'll assume the other postings I've seen about not using stops are guys on their way to a zero balance.

Would you say that the limit should be set at least as distant from the open as the stops? Why risk 20 pips if you are only trying to gain 10? Correct?

thanks,
Scarab
 
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