I actually do. Warren Buffet might have said never to buy a smartphone because there was no value in buying a smartphone. Even "guru" don't know everything. They are still humans like the rest of us.Well then I guess you have to ignore Warren Buffett and most of the "gurus".
Your most valuable lesson
- Thread starter John9999
- Start date
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Wide Stops, Longer time frames, understanding physics/momentum in markets and the technical analysis associated with that.
Understanding markets goals are to shake out the weak, and pay the algos/exchanges and pay the brokers.
Goal is to not be the Vig in the market.
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Wide Stops, Longer time frames, understanding physics/momentum in markets and the technical analysis associated with that.
Understanding markets goals are to shake out the weak, and pay the algos/exchanges and pay the brokers.
Goal is to not be the Vig in the market.
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How wide as a %?
Keep an open mind. You never know where your next nugget of information will come from. I have learned a lot from others on ET. You do not have to agree with everything that is posted on Elite Trader. Just open your mind and you might find nuggets, you can pick up on and use in your trading. If you have a closed mind, you are only hurting yourself!
It’s not a %. Honestly, as a position trader I’m always playing around with this stuff. You’re not going to snag the bottom. And once you have an order filled, it’s like grabbing a tiger by the toe. You just hope to hang on. For positional trades, I prefer at least 1.75 daily atr. That’s for my initial entry. So it’s a smallish line. Being a small line, I sometimes take off the stop just to see how things act. Once that order is out of the woods (based on market structure and my running unrealized profit), I work into the position size I really want. Patience is the key as it can take weeks/months before I size up. I only do it around strong strength and resistance (so my stops get considerably smaller, but I account for being wicked out of my trade). I’ve found that an hourly confirmation bar is a tight enough entry point. Slap a 1-2% risk on your pyramid trade (only this trade, let your scout position hang in case you get stopped out and it finds another solid support space, though there are many ways to play this). Let your stop dictate trade size, but again, give it a tad of birth.
Sometimes I mess around with intraday. I’d use whatever timescale atr is there if it’s swing trading (I can’t answer anything about scalping). If it’s less than an atr, how do you expect to stay in the trade?
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KNOW WHAT A FAT FINGER IS!! Double and triple check your trades. If you do not fully understand which way your are trading...STOP!! Do not pass go, do not collect $200.
https://www.google.com/url?sa=t&rct...finger_error&usg=AOvVaw1Hc78eAuiEo3tWVGXQ03g4
https://www.google.com/url?sa=t&rct...finger_error&usg=AOvVaw1Hc78eAuiEo3tWVGXQ03g4
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Anyhow, there will be a ton of different answers to this though, all based on your style of trading. I know of some mean reversion traders who don’t use stops. Some of them catch the falling knife. They take the pain until they can’t anymore. Check out chandelier stops. It’s a bit conservative (can be adjusted), but will allow you to take part in strong trends (I find 1.75 to work the best, regardless of time scale).
Never watch TV or read news. Be patient.
My lesson was that getting somewhat rich from trading is a lot easier than hanging onto it, which is the harder part. Many traders that get rich & continue trading go bust. The better traders that still have so mojo left will rebound & hang onto their gains the next time around having learned from the prior experience.
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