Quote from Big AAPL:
emg,
I read your posts in the ES journal everyday, from the "Good Morning Traders" recital to the distant price target "1 point trades".
You're a clever individual, no doubt. Personally, I am leaning towards the suspicion that you are literally calling the move with a pause level for at least a point reversal. Some people are apparently reading between the lines and profiting. I have done so myself.
However, I also understand your stance on stops. Before you preach to the masses, might I suggest that there are a multitude of fresh traders who NEED stops to remind them of why their trade is wrong. Methodology with no stops work for the seasoned veteran but can kill a neophyte.
Be kind to the noobs, and keep on truckin'
Regarding stops, I've come to the conclusion that stops are NOT the way to go regarding successful trading. I don't really subscribe to the "they know where the stops are and will come after them nonsense." Believe me, I've tried a bunch of those setting up a stop for 1 lot, waiting for it to get there in order to buy 5 lots, lol. It never works. I just think that the markets are made, logically, for most to lose and a few to win. This is why it's so lucrative. For this to happen, people MUST be shaken out of their positions. And the markets swing to a certain level and take out those stops.
Thus far my best performances have come without using stops. I still will sell when the price gets to my mental stop, but it really depends on the price action. I give it a little leeway. After the intitial price move, assuming it goes in my direction, i will move my mental stop to my entry level. But too many times, i've moved a real stop in at my entry level, only for it to come back down and clip the stop to only go higher. Very few if ever, has it collapsed through my stop without me being there to sell my position. Usually if the move has energy on the downside, you'll see it. With a technical stop in, no one is there to make the decision whether the move against your position is for real or not.
I notice that only when I am flustered emotionally do i put in a real technical stop now. I purchased gold at $1354, added to it multip times up to $1385, and had a MONSTER position at $1363 average price on the Feb11 contract. It flew all the way to $1430 and I was feeling good, had the position over a month, started to collapse back down. After a month or more of sweating the position out, gold had collapsed back down to $1370 or so taking all my profits with it. The last day, i just got tired of it and swayed from my typical routine of watching it and deciding whether to sell or not based on my own decision and just put the stop in at $1363. Well, the sucker came down and clipped $1363 a few weeks ago, it seriously went a dollar or two under that level before turning back up. I basically lost my position because I emotionally gave up and put a real stop in. Now it's jumped back up to $1406. Luckily, I re-entered a position at $1383, but still, if i had stuck to my usual routine this never would have been an issue and I'd still be holding my original position.
Anyway, sorry for the long post...basically real stops are overhyped in the trading community, and i think they do more damage than good. It's always better to always be around the PC at crucial points and make the decision yoruself.
