Trading with a Stop Loss in the Futures Market is for Losers
- Thread starter emg
- Start date
L O L ......... al trader:
just to remind you that you are logging in at the Elite Trader.
those who post would normally have something to say whether positive or negative about their own or others' tradings et al....
this is your second consecutive statement of the same nature that someone is losing....
are you losing.... something? what are you losing....? some marbles from bygone days.... if so that is wonderful....
so now.... you are quite lightened up by some of the Elite traders....
bravo....
i am only looking from the positive vintage that you are a jolly good fellow and a jolly happy trader of some notorious sort.... right?
show us, if you have time, some of your tools of trading.... perhaps we too could learn something from you.... particularly if you have losing trades--these are the ones that i am most interested in...., not with the common intention of belittlement, but.... because as a trader, i could arm myself and possibly avoid similar losses.... with much thanks and appreciation offered....
As an example, read bighog's old posts (2005) about trading ES. If that is not true wisdom coming from the real trader then I don't know what is.
P. S. How do you think, is there anything in this world that worries me less than someone believing that I am losing?
I see no reason in arguing on that matter. People who were interested (or suspicious) simply followed my live calls for some time or came to my chat and witnessed everything themselves. Somehow none of them concluded that I am losing...
Where do these morons come from?
He posted live trades for months. Are you stupid?
http://www.elitetrader.com/vb/showthread.php?s=&threadid=215669&perpage=6&pagenumber=14
Those that do not know how to add to average down/up are doomed.
More than 90% of small traders lose. They just lose!!
I can't resist the urge to comment. Speaking from personal experience I can add the following comments on my own trading:
<b>Background:</b>
> 10+ years trading ES and Russell (on Globex and ICE/NYBOT) over short timeframes (seconds-1/2 hr holding periods)
<b>Context:</b>
I use MP prior day value area(s) and POC along with current day value area(s), VWAP and POC to assess likely support/resistance along with volume/pace analysis, divergence and more mundane technical analysis. I try to fade extreems when markets are range bound and in wide range trends and to go with the trend when trends emerge.
I have traded fully automated and manually. I have a systematic approach/analysis framework that currently I implement manually. It is not a system but rather a set of methodologies and best practices.
<b>Re Russell & Stops:</b>
Trading more than 10 contracts per execution, stops (stop market being the worst) will do far more harm than good. Fills are terrible and opportunity to MANAGE the trade is entirely lost.
<b>Re Russell & Averaging:</b>
Often price oscillates rapidly and with significantly larger range than average (for the given timeframe) when approaching/testing former value areas, support, resistance etc. Precise entry is ideal but sometimes difficult due to the speed of trade. Staging an entry over a range affords an average price that is closer to ideal than is possible with an ALL IN/ ALL OUT approach.
Also, at the more volatile points in a trading session there are opportunities to enter many orders on BOTH sides of the market as the desired directional position is established in order to profit from the volatility preceding the eventual turn/continuation/breakout.
In these cases, adding/removing helps. It's a lot more fluid and responsive to what is actually happening and provides much more feedback on the true supply/demand picture than to take a position, enter a stoploss and hold for profit or loss.
That said, averaging against a strong trend is a fools errand.
Reversal at size is far better once order flow indicates that price is not being rejected. All the better if there is no clear target (It is far away and thereby shows greater potential albeit scarier/harder to trade).
If you know you are mis-positioned relative to the timeframe or price thresholds your decisions and trades are based on GET OUT or REVERSE especially in the RUSSELL but do it with limit orders. You are better off. The volatility will most likely fill you at a far better price than a stop mkt once the stops get hit. Someone sold to /bought from those stops, never forget it. Even raising/lowering the limit order in effect chasing the market yields far better results (over time and most of the time) than straight stops.
<b>RE S&P and Stops.</b>
Stops can be helpful in the ES because there is enough liquidity that you will most likely have limited slippage. Placement of stops with OCO and OSO+OCO orders can be useful when trading multiple markets. The ES is slower and with more volume traded at each level.
It can be easier to plan the IF/THEN scenarios and place orders in advance essentially automating what you might do while manually managing trades and participating in scenarios.
Still I prefer manually entering/adding and scaling out/exiting/reversing based on what is happening and have not yet been able to automate what is posible to assess via hands on participation.
<b>Re averaging in on ES:</b>
The movement tends to be chunkier for lack of a better term. I'll use a small flight of stairs (4 steps between landings) as an analogy. If I anticipate and observe rejection one or two steps above a landing, I would not hesitate to add on the third or fourth steps. If we move to the next landing + one or steps two I would also consider adding (2x) with the anticipation that we would test steps 3 or 4 of the prior flight if I detect rejection, hesitation, new supply/demand, change in pace etc.
At some point though we risk moving to the next floor/value area which could entail a quick passage through several flights.
Being able to assess whether price is indeed being rejected or accepted is critical - adding on a last thrust of short covering/selling is great, the more the better but it happens fast and fills are harder at the limits. Being able to assess that it was too easy to be filled or that there continues to be supply/demand and that it IS HAVING AN IMPACT ON PRICE MOVEMENT is critical. If you can't tell it is climax buying/selling that is fading the averaging strategy will be costly as you'll inevitably be underwater when price moves to the next value area only to pause or worse pause and continue.
Averaging is only a god idea if you know what you are doing, have a plan and understand how it works relative to your risk tolerance and the overall expectancy of your system/methodology.
If you don't know what I'm talking about, I highly suggest you look into position size, expectancy, optimal f, historical volatility and range etc. Trading properly requires knowledge, skill and expertise.
<b>Blanket statements along the lines of averaging is bad or stops are for losers cause more harm than good to inexperienced traders because they imply there is a single correct/better way to do something without considering context.
Context is key.</b>
For optimal results, each scenario, context and set of conditions requires the optimal approach to trade entry, position size and trade management.
Learning the above was costly and worth every penny.
Best,
Alex
<b>Background:</b>
> 10+ years trading ES and Russell (on Globex and ICE/NYBOT) over short timeframes (seconds-1/2 hr holding periods)
<b>Context:</b>
I use MP prior day value area(s) and POC along with current day value area(s), VWAP and POC to assess likely support/resistance along with volume/pace analysis, divergence and more mundane technical analysis. I try to fade extreems when markets are range bound and in wide range trends and to go with the trend when trends emerge.
I have traded fully automated and manually. I have a systematic approach/analysis framework that currently I implement manually. It is not a system but rather a set of methodologies and best practices.
<b>Re Russell & Stops:</b>
Trading more than 10 contracts per execution, stops (stop market being the worst) will do far more harm than good. Fills are terrible and opportunity to MANAGE the trade is entirely lost.
<b>Re Russell & Averaging:</b>
Often price oscillates rapidly and with significantly larger range than average (for the given timeframe) when approaching/testing former value areas, support, resistance etc. Precise entry is ideal but sometimes difficult due to the speed of trade. Staging an entry over a range affords an average price that is closer to ideal than is possible with an ALL IN/ ALL OUT approach.
Also, at the more volatile points in a trading session there are opportunities to enter many orders on BOTH sides of the market as the desired directional position is established in order to profit from the volatility preceding the eventual turn/continuation/breakout.
In these cases, adding/removing helps. It's a lot more fluid and responsive to what is actually happening and provides much more feedback on the true supply/demand picture than to take a position, enter a stoploss and hold for profit or loss.
That said, averaging against a strong trend is a fools errand.
Reversal at size is far better once order flow indicates that price is not being rejected. All the better if there is no clear target (It is far away and thereby shows greater potential albeit scarier/harder to trade).
If you know you are mis-positioned relative to the timeframe or price thresholds your decisions and trades are based on GET OUT or REVERSE especially in the RUSSELL but do it with limit orders. You are better off. The volatility will most likely fill you at a far better price than a stop mkt once the stops get hit. Someone sold to /bought from those stops, never forget it. Even raising/lowering the limit order in effect chasing the market yields far better results (over time and most of the time) than straight stops.
<b>RE S&P and Stops.</b>
Stops can be helpful in the ES because there is enough liquidity that you will most likely have limited slippage. Placement of stops with OCO and OSO+OCO orders can be useful when trading multiple markets. The ES is slower and with more volume traded at each level.
It can be easier to plan the IF/THEN scenarios and place orders in advance essentially automating what you might do while manually managing trades and participating in scenarios.
Still I prefer manually entering/adding and scaling out/exiting/reversing based on what is happening and have not yet been able to automate what is posible to assess via hands on participation.
<b>Re averaging in on ES:</b>
The movement tends to be chunkier for lack of a better term. I'll use a small flight of stairs (4 steps between landings) as an analogy. If I anticipate and observe rejection one or two steps above a landing, I would not hesitate to add on the third or fourth steps. If we move to the next landing + one or steps two I would also consider adding (2x) with the anticipation that we would test steps 3 or 4 of the prior flight if I detect rejection, hesitation, new supply/demand, change in pace etc.
At some point though we risk moving to the next floor/value area which could entail a quick passage through several flights.
Being able to assess whether price is indeed being rejected or accepted is critical - adding on a last thrust of short covering/selling is great, the more the better but it happens fast and fills are harder at the limits. Being able to assess that it was too easy to be filled or that there continues to be supply/demand and that it IS HAVING AN IMPACT ON PRICE MOVEMENT is critical. If you can't tell it is climax buying/selling that is fading the averaging strategy will be costly as you'll inevitably be underwater when price moves to the next value area only to pause or worse pause and continue.
Averaging is only a god idea if you know what you are doing, have a plan and understand how it works relative to your risk tolerance and the overall expectancy of your system/methodology.
If you don't know what I'm talking about, I highly suggest you look into position size, expectancy, optimal f, historical volatility and range etc. Trading properly requires knowledge, skill and expertise.
<b>Blanket statements along the lines of averaging is bad or stops are for losers cause more harm than good to inexperienced traders because they imply there is a single correct/better way to do something without considering context.
Context is key.</b>
For optimal results, each scenario, context and set of conditions requires the optimal approach to trade entry, position size and trade management.
Learning the above was costly and worth every penny.
Best,
Alex