What Are Your Golden Rules?

maxinger said:
millions of experts said keep your stops small.

But my trade plan says keep my stops big.

well. cannot blindly listen to the experts.

Those experts failed to quantify how small the stops should be.
also they failed to realise different people have different experiences, and
different programs in our subconscious mind.
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It really depends on personality of the trader and trading fees. Personally, I keep my stops very small and its working.
 
carrer said:
1. Always follow your rules (tested with profitable results). If you don't, your profits would become unpredictable. You could make more or less than expected, but it is not predictable.

2. Diversification is the only free lunch. By diversifying you will minimize your risk, hence increases your return. Provided you already have a profitable strategy.
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Diversification as pertaining to stocks....
It can be a type of dilution diversification which is counterproductive, however if with it you only target the best quality stocks on offer then agreed, it lowers volatility of returns, reduces stress, the totoise as it were, will outrun the hare.
 
maxinger said:
Also set your stop loss far far away.
Do not panic and tighten your stop too soon.
Give allowance for market to retrace / pull back.
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I know each trade is different but curious how far away you typically set your stop loss in % lost?
 
ironchef said:
After been stopped out of my FB @ $20 (after IPO), AAPL @ ($400 prior to split) because I read O'Neil and put on a 8% stop. Couldn't get back in on both until recently. Where were you when I needed you?
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If you bought FB at the IPO price ($38), I don't know what kind of wide stop would have prevented you from getting out at $20. If you are in it long-term, I believe you should take a proper size (as % of your account) and forget about stop loss. Your exit should be more fundamentally driven than automatic stops.
 
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