Trading with a Stop Loss in the Futures Market is for Losers

[ras72]

Quote from emg:

Those (SMALL TRADERS) that trade with stop in the futures/commodity market are doomed to fail...

Think about it small traders, what is the main reason for the loss or blowing your account? Your stop orders...

Force trading, overleverage (trading with more cars) with less capital in the account would make sense to place stop and are doomed...

Solution:

with $100K minimum in the account and begin to trade 1 car and average down/up 15-50pts against u will minimize risk...
...
I am looking for the best answers Bring them up!

It isn't about "small traders" losing due to overleverage and stops. It's that the small accounts generally correspond to new market entrants who lose because they are completely unprepared.

And the trading style suggested in the OP is only one of many that could be profitably employed. And it's an extremely conservative one while still not being invulnerable from prolonged adverse excursions. (Except that one might choose parameters that would allow one to die of old age before chance of ruin catches up)

Taking for good the publicly circulating figures, the new entrants', annual basis, failure rates are 75% in stocks, 95% in futures and 98% in FX. These numbers indicate a direct relationship with leverage. But evidently that isn't the only factor.

Arguably a professional could grow a small account while unprepared new entrants would lose even if starting with large capital and low leverage whatever heir use of stops. It would just take them longer.

- ras72

 

[Rorschach_test]

Quote from emg:

Here is the question for u, is your stop held in the cme server, broker server, or on your computer?

Haha...LOL!

 

[Rorschach_test]

Quote from eudaemon:

PRO-FESSER Bone uses stoplimits with an $1,800 per month platform.

It follows logically from the title of this thread, that he is the biggest loser in this thread, because he not only uses stops, but pays a lot of money for the right to do so faster than anyone else. LOLMAZO.

Another ROFLMFAO!

 

[Rorschach_test]

Quote from logic_man:

My response came across wrong. I was agreeing with you but making the point that the posters who are allegedly trading without stops are the ones who are "paper-trading tigers", so they simply assume infinite capital and time into existence so they can be right, eventually, on every trade.

There is no need for the infinite capital,to not use the stops.2 contracts is enough for this.But, you HAVE to be right on every trade,if you know what i mean.

 

[Rorschach_test]

Quote from emg:



This whole trading system (nyse, nasdaq, cme, eurex) is only built for big traders and institution. It is not built for small traders.

And that is how it really works.That slogan should be hang out on every trading related website!With this line outlined:

It is not built for small traders

 

[ras72]

There is another way to trade without stops: Always in, continous add/reduce/reverse. It requires significant skills and low effective leverage.

- ras72

 

[Wide Tailz]

Quote from Rorschach_test:

And that is how it really works.That slogan should be hang out on every trading related website!With this line outlined:

It is not built for small traders

Pikers are at a significant advantage when trading, if we assume they have the same edge and money management as the big accounts.

1. Their positions do not move the tape any further than the bid/ask spread, so they can quickly liquidate at market when taking profitz

2. No one is going to HFT their azz when they leave an open limit, so they can be assured they will get filled when price comes to them

3. Total anonymity. If they had pulled an LTCM spread trading averaging down and down and down during asian financial crisis, GS wouldn't have attacked, because they are too small to be of value

Small traders have a significant advantage. If this were not the case, successful funds would always accept new money. PTJ has long closed his firm to new customers because trading gets very hard after a certain size.

:eek:

 

[GVglobal limited]

Trading with stop loss is good for short term trader and also for those who invest large sum of money. If you are trading with stop loss on long term investments and as he said, with small $5, $20k, loss is inevitable.

 

[nu$]

Trading nikkei futures in paper account with 20k. no stops. I learned fast this doesn't work. Trade went opposite direction and created a loss of $4700 in 2 days because I held on hoping it would come back. Glad this was paper money. Started using stops today after closing at a loss. Will use stops from now on.

 

[cornix]

Quote from nu$:

Trading nikkei futures in paper account with 20k. no stops. I learned fast this doesn't work. Trade went opposite direction and created a loss of $4700 in 2 days because I held on hoping it would come back. Glad this was paper money. Started using stops today after closing at a loss. Will use stops from now on.

Yep. Everyone uses a stop (point where it's time to say a losing trade goodbye). Smarter traders can see when trade goes wrong earlier, dumb money later. Sometimes as late as margin call.