Excellent post, sounds like someone who has done his homework. Mike Harris in his blog shows how 2 pips of commission and slippage in EOD trading makes forex a 100% negative sum game unless one possesses an extraordinary edge. He also shows that when only1 pip is added for commission and slippage in intraday trading it becomes a 100% negative sum game, unless one possesses some structural edge that is unique.
Trading with a Stop Loss in the Futures Market is for Losers
- Thread starter emg
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Excellent post, sounds like someone who has done his homework. Mike Harris in his blog shows how 2 pips of commission and slippage in EOD trading makes forex a 100% negative sum game unless one possesses an extraordinary edge. He also shows that when only1 pip is added for commission and slippage in intraday trading it becomes a 100% negative sum game, unless one possesses some structural edge that is unique.
That's an excellent point and very technical. If you don't mind me asking, how long have you been in this business?
9 y
I don't think a 4 point move in ES is too small a target, it all depends on what your stops are. If you are in the game to either win or loss 4 points on ES or 20 pips on Euro, good chance you will fail. Stops should always be much smaller than your targets, so if you are placing a trade where your target is 4 points (200$) then your stop should be 2 points.
Now the art lies in choosing a good entry point, often 2 point in ES wont be enough as a stop, but there can be points. The important thing is to always use a stop which is smaller than your target. You have to consider the volatility and ddaily range to come to a stop and target
Now the art lies in choosing a good entry point, often 2 point in ES wont be enough as a stop, but there can be points. The important thing is to always use a stop which is smaller than your target. You have to consider the volatility and ddaily range to come to a stop and target
If u trade with a 1 pt stop and 4 pt move, its reasonable.
If you trade with a 8-12 point stop, u better look for 20 pt moves. that's what I think.
All on stops
If you trade with a 8-12 point stop, u better look for 20 pt moves. that's what I think.
All on stops
entry point is not important as the directional move...
If you get in late/early, and with a reasonable stop, u still make $$ in the right direction.
Whats impt is that type of stops u got, and what u define as noise. Do u define a 80 point (Dow Jones) as noise? I would.
If you get in late/early, and with a reasonable stop, u still make $$ in the right direction.
Whats impt is that type of stops u got, and what u define as noise. Do u define a 80 point (Dow Jones) as noise? I would.
Just making your targets 4 times bigger than your stops doesn't make you a winner , you can still lose money - most likely - even if you make your targets 10 times bigger than your stops ... Its a very difficult game but tight stops isnt the answer not for everyone anyway , it triggers a whole load of issues : emotional , getting stopped out by noise , paying the spread many times , playing with big leverage , overtrading , getting chopped to death ... etc .
The funny thing is when traders get stopped out in their 2 point SL they immediately start looking to re-enter ! Now why would you re-enter and why you exited in the first place anyway
The funny thing is when traders get stopped out in their 2 point SL they immediately start looking to re-enter ! Now why would you re-enter and why you exited in the first place anyway
So true, especially if you are day trading or higher frequency regimes. Tight stops and you are just daring the market to take you out. The fact of the matter is that we live in a reality of choppiness and turbulence.
So, if you are trading flat price, IMHO your only viable alternative for consistency is to choose an appropriate product to trade with a vol/ATR that allows you to place a stop in such a way that satisfies both your own personal emotional reality for realistic drawdowns and the market's propensity to take you out early.
Any position you put on will, at some point in it's lifespan, be underwater. And IMHO most traders that I see sabotage decent trading strategies with their insistence on stop placement that is simply not realistic and not compatible with the realities of flat price trading ranges.
Markets correct and markets consolidate and markets fail off. You can embrace the noise and turbulence and learn to live with it - or find another line of work if you are trading flat price.