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Trading with a Stop Loss in the Futures Market is for Losers
- Thread starter emg
- Start date
$500 margins gives you 10 lots at that size. That's more than enough. The way to manage risk in the futures markets is through proper money management, not stops that will certainly get tagged. I've been trading futures for 22 years and the two leading causes of failure are (1) being undercapitalized and, (2) stops.
Quote from FreakofNature:
Aside from tax benefits and around the clock trading what's the point of trading futures if you gonna require 50k to trade a lousy contract.
At the same time, if you only use 10% of your capital, why do you need the rest of the 90% ?
FoN
Quote from the1:
$500 margins gives you 10 lots at that size. That's more than enough. The way to manage risk in the futures markets is through proper money management, not stops that will certainly get tagged. I've been trading futures for 22 years and the two leading causes of failure are (1) being undercapitalized and, (2) stops.
Ok, I had read your original content incorrectly.
Thanks for the clarification.
FoN
Quote from piezoe:
Thank you. Emg appears to be a novice trader, I agree.
I would agree as well, but I would also add that "his instinct" that stops maybe touched much more often than people generally think is correct. It is however not an aberration from the market, but rather people's instincts which may not be accurate.
Quote from the1:
The best way to trade using stops is knowing where traders place them and taking advantage of that fact. I go out of my way to hunt stops and take the other side of that trade.
This is the key to trading in my humble opinion.
Only thing I might add is to stick with the dominant trend and then search for the counter trader stops, it's gold.
NAD
Agree. If surf's up look for a corrective move and an obvious place where the early longs would have their stops. Outside of the first 30 to 60 minutes the market tends to make one false move before it continues it's upward move, or downward should that be the case. Wait until the market comes back to tag stops and take the trigger on the next push up. Just one strategy of many in the toolbox. You gotta know what kind of market you're trading.
Quote from noaveragingdown:
This is the key to trading in my humble opinion.
Only thing I might add is to stick with the dominant trend and then search for the counter trader stops, it's gold.
NAD
EMG, also as Bone pointed out everyone has an "uncle point". A better discussion would be to ask, what are the ways to manage risk effectively? But, of course, every risk is a potential reward.
We need to define what "works" means, as well. If you mean to say "stops don't decrease the max drawdown for many strategies or traders" then I would agree. However, stops do decrease the maximum possible adverse excursion in many cases. The relationship between the drawdown and the mae are worthwhile to consider on. The tighter the stop, the lesser the mae, but the higher the probability of getting stopped out (the higher the drawdown). Both the MAE and drawdown are very important aspects of a system. A system with a low drawdown and low MAE is suited to leveraging. Turning the question to managing risk, you can look at a whole assortment of strategies and methods.
One other note, each ES contract is only worth appx $64,000 today.
We need to define what "works" means, as well. If you mean to say "stops don't decrease the max drawdown for many strategies or traders" then I would agree. However, stops do decrease the maximum possible adverse excursion in many cases. The relationship between the drawdown and the mae are worthwhile to consider on. The tighter the stop, the lesser the mae, but the higher the probability of getting stopped out (the higher the drawdown). Both the MAE and drawdown are very important aspects of a system. A system with a low drawdown and low MAE is suited to leveraging. Turning the question to managing risk, you can look at a whole assortment of strategies and methods.
One other note, each ES contract is only worth appx $64,000 today.
[
Remember SMALL TRADERS:
More than 90% of small traders lose. They just lose!!!!
I am looking for the best answers Bring them up! [/B][/QUOTE]
SON..SON,,SON,LET ME STOP YOU THERE.
Are you a preacher man?are you a holy bible thumping layman on some kinda insane mission?
Listen,are you a patriot,are ya? Do you believe in God,believe in your country?
Ever stepped up to the plate,brought your shoulder to bear for the cause? Love apple pie?
Ever been to Wall Street son?
Ever tried to find Goldman Sachs?
Did you wonder why you couldn't find a sign?
Did you ever end up in a diner somewhere across the street?
Was there a Wall Street trader in there son,whose eyes met yours momentarily,and,just in that instant.made you feel worthless?
Is that why i see you here today son..,because you feel worthless? Son,son, you are not worthless
Don't you know that before God we are all equal?
Don't you know that it's every americans' God given,right...i said RIGHT (right on brother,right on) (god given) to LIVE THE AMERICAN DREEEEEEAMM
Don't you know Wall St depends on it?
Don't you know the government depends on it?
your country depends on it,other countries depend on hit,hell they way things are going the whole world depends on it.
Are you trying to sabotage the entire capitalistic system,is that your plan?
You're not a commie are you son,are you?
Are you trying to bring down The holy church of America?
Son do you know the penalty for attempting to pervert the course of Wall Street and The holy church of America....?
Remember SMALL TRADERS:
More than 90% of small traders lose. They just lose!!!!
I am looking for the best answers Bring them up! [/B][/QUOTE]
SON..SON,,SON,LET ME STOP YOU THERE.
Are you a preacher man?are you a holy bible thumping layman on some kinda insane mission?
Listen,are you a patriot,are ya? Do you believe in God,believe in your country?
Ever stepped up to the plate,brought your shoulder to bear for the cause? Love apple pie?
Ever been to Wall Street son?
Ever tried to find Goldman Sachs?
Did you wonder why you couldn't find a sign?
Did you ever end up in a diner somewhere across the street?
Was there a Wall Street trader in there son,whose eyes met yours momentarily,and,just in that instant.made you feel worthless?
Is that why i see you here today son..,because you feel worthless? Son,son, you are not worthless
Don't you know that before God we are all equal?
Don't you know that it's every americans' God given,right...i said RIGHT (right on brother,right on) (god given) to LIVE THE AMERICAN DREEEEEEAMM
Don't you know Wall St depends on it?
Don't you know the government depends on it?
your country depends on it,other countries depend on hit,hell they way things are going the whole world depends on it.
Are you trying to sabotage the entire capitalistic system,is that your plan?
You're not a commie are you son,are you?
Are you trying to bring down The holy church of America?
Son do you know the penalty for attempting to pervert the course of Wall Street and The holy church of America....?