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

So most of the Market Wizards, loads of other successful money managers in the world are all wimps and don't know any better?
 
If anyone on this thread thinks for one millisecond that a HF or Bank Desk trader, regardless of background and experience level, trades without a stop - either self or management imposed; then you are seriously delusional. All of those traders must be losers then, according to EMG ?
 
Quote from ras72:

I've come to the same conclusion as emg. Stops are for wimps ...and for those who don't know any better.

- ras72
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Are you a former Lehman trader? :D
 
Quote from ras72:

I've come to the same conclusion as emg. Stops are for wimps ...and for those who don't know any better.

- ras72
More...


I rather be a wimp and profitable than a broke braggart...
 
LOL

I’ve posted, more than once;

One should be looking for behavior on a chart (strength / weakness / control / battles / excitement / lethargy / etc)

It’s this same exact skill – that's required when one is reading – oh let’s say a post for instance – and trying to glean the posters intent

The intent in this case would be Ras’ subtle humor (and I don’t know Ras from Adam.. but I’m willing to bet…)

So here’s an assist in picking up his subtle-ness


Quote from ras72:

I've come to the conclusion. Stops are for those who don't know.

- ras72
More...

Same post with the noise filtered out


Same holds for a chart - learn to filter that which has no value (there's plenty of it) and focus on what matters

The message will then be clear to see (and exploit)

=====================

Ras

Please correct me if i am wrong... but I don't think I am

===================

Oh and for the record;

I never know what price will do next - so I use stops and willing take the loss(es)

:)

RN
 
I would like to take the opportunity presented by Redneck's kind intervention in my favor to rephrase my previous statement regarding the use of stops in the following manner:

"Stops are for wimps ...and for those who don't know any better."

And furthermore I'd like to state for the record, if I may, that I truely don't give a frak what any lifeform in the Universe thinks.

Redneck, what the heck are you doing? :)
We don't get involved with other people's emotions; we exploit them!

- ras72
 
Quote from ras72:

Redneck, what the heck are you doing? :)
We don't get involved with other people's emotions; we exploit them!

- ras72
More...


Moment of weakness

And yes we do

RN
 
My take on the subject is that even speaking from the perspective of highly leveraged directional trading, stops should be viewed in a far less dogmatic manner.

EURUSD, 2013 10 08 / 09 I started building a short position right from the first up breakout of that grinding irregular up progression. I based that on my analysis and was later completely reassured on my stance by price action. I increased my short on up moves and reduced it on down moves. By the start of the down move I had established a very good position in both price and volume. The ensuing deep down move and the retracement that peaked 5hrs later had me do nothing. I'm sure many less convinced shorts were shaken out there, either at a loss or "to prevent a winner turning into a loser", to cite another dogma I don't subscribe to.

Why not just enter later, after the top has been established? Or at the retracement? Because you don't know that! Genius.
Use rigid entry and stop there and you'll get wipped or shaken out or you'll make a pittance.

So, it's all good and well "you have to protect yourself because the market can wipe you out" but also "Not even JD Rockfeller could afford to lose a position" (Jesse Livermore) and: "Scared money never wins".

I'm sure it won't be of much help, by itself, but if you have conviction about an impending move, based on proven work you should be strong enough not to be scared out, while at the same time remaining watchful for signs of scenario failure. It's a delicate balance. Psychologically demanding.

Worse comes to worse, yeah, sure, it could be a "moderate bloodbath" (as I jokingly call the most adverse developments I experience). You keep your cool and scale out. Once flat you pause, regroup and reassess.

All of this of course pertains to trading. If you have given up on trading, then, sure, one entry, two known outcomes: trigger, 20 pips SL, 20 pips TP, and no clue what's going on. That's the easy way out. (LOL)

- ras72
 
Quote from emg:

Those (SMALL TRADERS) that trade with stop in the futures/commodity market are doomed to fail. I am 99.99% sure, u will lose indefinitely.

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

Of course, small traders need to place stop due to small RISK capital in the account ($5K. $20K, $50K). Small Traders are taught by 3rd party educational and system vendors to place stop to manage risk and yet they represent more than 90% of small trader lose!! They just lose!!

Force trading, overleverage (trading with more cars) with less capital in the account would make sense to place stop and are doomed. 99.99% u will get stopped out.

Adding to average down is risky if one knows how to do it. Most SMALL TRADERS add to average down/up by every tick or point are doomed to fail and will blow their tiny account ($5K, $10K, $20K, 50K) in no time. THEY WILL FAIL!


Solution:

with $100K minimum in the account and begin to trade 1 car and average down/up 15-50pts against u will minimize risk. For example:


short 1325.00 emini sp 500 on 1 car.

es went against you 20pts. your drawdown is $1000 on $100K account. Is that a lot of heat? U are down only 1% of your account. Is that a lot of heat?

U will go ahead and add and your average price will be 3pts away from the market price. From there u take small profit or loss.

$100K account is equal to $5000 minimum standard to open a futures account and begin trading with 1 car


those that do not have that kind of money should either join the house or should not be trading futures market at all

According to the CFTC:

Commodity Futures Trading Commission Futures and Options trading has large potential rewards, but also large potential risk. You must be aware of the risks and be willing to accept them in order to invest in the futures and options markets.

The risk of loss in trading commodities can be substantial. You should therefore carefully consider whether such trading is suitable for you in light of your financial condition.


Remember SMALL TRADERS:

More than 90% of small traders lose. They just lose!!!!


I am looking for the best answers Bring them up!
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Having had a bad experience with a stop order loss myself, I agree with you that it can contribute to losing money if the order is too tight. Nearly all of my profitable trades, have at some point, been unprofitable, and had an air tight stop order loss been there to take me out, I wouldn't have profited all those times.

I do however disagree with you on 2 points:

1) I don't believe you need 100K to get into futures trading. Obviously, having more money is always an advantage, and going in with too little can be a disadvantage if your basically scared money, but if your saying "If you don't have 100K don't get into futures trading." I disagree.

2) I also disagree with you if you are saying that you should never place a stop order loss, ever. While a winning trade is usually a losing trade at some point, there is also a point when its obvious that your wrong and this isn't going to correct course. If you short sell the S&P 500 Mini believing it can go down 7 pts and then it surges to 12, is that really going to correct course for that day?

If you have longer than a 1 day time frame, let's say giving yourself several weeks to a month, is it really ok to never consider putting in a stop order loss at a certain mark, ever?

So while I agree with you that super tight stop order losses can be detrimental, I disagree with you if you are taking this to an extreme.
 
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