what time frame to enforce the "never let a winner turn into a loser" rule?
- Thread starter tradingcards
- Start date
why use stops if the market is up?take an instrument that trending,go long only,if drawn down - wait until be point.you`ll never lose that way.Ever!
p.s. take dec.gold futs for e.g. trade it long only,if drawn down - take oct.gold futs and trade it,if drawn donw - take jan12.gold futs and trade it.....and so on until you puke!!!!!!!!!!!!!!!!
or until margin call
:eek: :eek: :eek:
p.s. take dec.gold futs for e.g. trade it long only,if drawn down - take oct.gold futs and trade it,if drawn donw - take jan12.gold futs and trade it.....and so on until you puke!!!!!!!!!!!!!!!!
or until margin call
:eek: :eek: :eek:
I miss the days when I could get that messed up on a Friday night.Quote from SnakeEYE:
why use stops if the market is up?take an instrument that trending,go long only,if drawn down - wait until be point.you`ll never lose that way.Ever!
p.s. take dec.gold futs for e.g. trade it long only,if drawn down - take oct.gold futs and trade it,if drawn donw - take jan12.gold futs and trade it.....and so on until you puke!!!!!!!!!!!!!!!!
or until margin call
:eek: :eek: :eek:
Multiple stop strategies to be employed. Equity based, as in % of core equity, % of open equity, or volatility, time, current bar length using average bar length in various timeframes of your choosing.
Combinations of the above apply also based upon strategy, and parameters that best fit your desired outcome.
What is your primary timeframe, and you can dial down from there, or give it a wider berth with smaller position to attempt following the longer term. There is not a one size fits all, and again you can combine.
I swing trade using daily charts, and use both daily signals, and when monitoring permits looking for entries, exits using 65 min bars, and occasionally 15 min. A move that progresses in a larger timeframe starts in a smaller time frame.
Combinations of the above apply also based upon strategy, and parameters that best fit your desired outcome.
What is your primary timeframe, and you can dial down from there, or give it a wider berth with smaller position to attempt following the longer term. There is not a one size fits all, and again you can combine.
I swing trade using daily charts, and use both daily signals, and when monitoring permits looking for entries, exits using 65 min bars, and occasionally 15 min. A move that progresses in a larger timeframe starts in a smaller time frame.
Break Even Point in Day Trading. - That's my headache at this time. It's often hit in a trade that turns out to be a winner otherwise. Based on the strategy that is starting to develop in my day trading the ratio of winning to losing trades is approximately 50/50 and that's until I have made several mistakes that makes that ratio worse and ... I'm in red.
The trade is either a winner or a loser to me. A winning trade is the one that hits the profit target. A losing trade is the one that fails from the start or goes in the desired direction but doesn't reach the profit target and comes back to hit the Stop Loss. Scratch Trade is kind of a loser too, because it doesn't produce a profit.
I cannot do anything about the trade that fails from the start - it will hit my predetermined Stop Loss. However, if the trade goes the desired direction I can do two things: tighten my Stop Loss and sit and wait until that Stop Loss is hit or my Profit Target is hit.
I still have to master things that were mentioned here by other traders. Provided I will, the ideal outcome would be the number of losing trades will be no more than 70% with Scratch Trades included and the winning trades will be hitting 1/3 Risk:Reward Profit Target. This way I will be in the green, always. Whether or not I will be able to accomplish that, time will tell.
The trade is either a winner or a loser to me. A winning trade is the one that hits the profit target. A losing trade is the one that fails from the start or goes in the desired direction but doesn't reach the profit target and comes back to hit the Stop Loss. Scratch Trade is kind of a loser too, because it doesn't produce a profit.
I cannot do anything about the trade that fails from the start - it will hit my predetermined Stop Loss. However, if the trade goes the desired direction I can do two things: tighten my Stop Loss and sit and wait until that Stop Loss is hit or my Profit Target is hit.
I still have to master things that were mentioned here by other traders. Provided I will, the ideal outcome would be the number of losing trades will be no more than 70% with Scratch Trades included and the winning trades will be hitting 1/3 Risk:Reward Profit Target. This way I will be in the green, always. Whether or not I will be able to accomplish that, time will tell.
As you can see, the common wisdom isn't well enough defined to be useful. It can't be true because it isn't defined accurately enough for it to be possible to be true!
There is really no single or right answer to your question. However, most trading methods that work will have losers that were once in profit to sometimes even a worthwhile degree.
Dr. Steenbarger suggested to take cut a trade after 50% of the profits were given back. In general, you should cut a trade when the future risk outweighs the future gains.
You need to consider several factors including:
Probability of future loss & Magnitude of loss
Probability of future gain and Magnitude of gain
Own psychology -- even if the optimal action is to allow a large winner to turn into a loss then it may not be your best action if it will impact your psychology and trading negatively.
It is not enough to think about one in isolation. I'm not sure why you believe that beginners should use hard stops and I wouldn't assume that to be true, at all.
There is really no single or right answer to your question. However, most trading methods that work will have losers that were once in profit to sometimes even a worthwhile degree.
Dr. Steenbarger suggested to take cut a trade after 50% of the profits were given back. In general, you should cut a trade when the future risk outweighs the future gains.
You need to consider several factors including:
Probability of future loss & Magnitude of loss
Probability of future gain and Magnitude of gain
Own psychology -- even if the optimal action is to allow a large winner to turn into a loss then it may not be your best action if it will impact your psychology and trading negatively.
It is not enough to think about one in isolation. I'm not sure why you believe that beginners should use hard stops and I wouldn't assume that to be true, at all.
And, this is probably related too:
Well Lucias, I think you would probably agree, that if your original strategy calls for something like risk to reward of 1:3 and you start moving stops around, that's going to give you something less than 1:3 over time.
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You are probably right.
However, here is what I'm trying to accomplish and I think it's still related to this thread. "One" in 1/3 Risk:Reward is the maximum I can allow myself and that's on its own is quite an accomplishment for me. "Three" is the target I attempt to hit on every trade.
And I'm prepared to chop my finger off every time I hit the "Exit" button when I THINK it's time to exit before the target is hit. - Just as bad as not honoring your Stop Loss, wouldn't you agree?
Below the Break Even Point is the loss though. Moving the Stop Loss to the Break Even Point is minimising the profit potential. With 1:3 Risk/Reward Profit Targets only 30% winning trades are needed to recover from those trades that fail from the start even if they occur 70% of the time.
How many times a trade would turn around right after hitting your Stop Loss. Nobody questions Stop Loss, though. Why question the Break Even Point then?
We have a finite amount of capital. Protection first, right? It looks like, by trying to save a point I will sacrifice three. Hence the dilema that's causing the headache.
Please help if you think it's related to this thread.