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zero number game zeroing me out!

  • #21
  • Aug 29, 2011 9:32pm Aug 29, 2011 9:32pm
Quoting pippin4me
I agree but if it was easy to make millions, everyone will be doing it.

Your job is to sift though the BS and find what works for you. Sorry, no other way
I wasn't speaking about myself, or if I was, it was my self from several years ago. What I was really trying to get at, is that with so many differing opinions, many of which are polar opposites of each other in fact, some of them almost have to be intentionally misleading. One guy says he KNOWS that stops are unneccessary to trading, and the next guys says he KNOWS that they are. Is the one guy just plain wrong, or is he trying to mislead on purpose? That was where my comment was directed.
To improve is to change. To perfect, is to change often.
  • #22
  • Aug 29, 2011 9:34pm Aug 29, 2011 9:34pm
I wake up and find loads of posts!

I scalp so my entry is based on the turn on the smaller time frame so I already have an 'expectation' that price will go in my directional bias, once I see my signal to buy or sell, I enter then place a hard stop. Right now I'm trying to decide a few things with the stop loss --- hard or mental, small hard stop (since I have an expectation, a stop at the bottom of the turn), a bigger hard stop loss with smaller position, or a mental stop which allows the odd spikes.

But, I agree with redlion here. I think clustering stops together is sure way for a dealer to take easy money.

Mmm I think I answered my own question. if I'm there at the trading station, the best way for now is to place a mental stop and close when I see something not going my way. If I'm not there then a hard stop and pray!

Good discussion everyone, thanks.
  • #23
  • Aug 29, 2011 9:47pm Aug 29, 2011 9:47pm
Quoting forexhard
I wasn't speaking about myself, or if I was, it was my self from several years ago. What I was really trying to get at, is that with so many differing opinions, many of which are polar opposites of each other in fact, some of them almost have to be intentionally misleading. One guy says he KNOWS that stops are unneccessary to trading, and the next guys says he KNOWS that they are. Is the one guy just plain wrong, or is he trying to mislead on purpose? That was where my comment was directed.

Hi forexhard, yeah tell me about it.

I'm not being aggressive with you, just stating what I think is a fact. Sorry geez!
  • #24
  • Aug 29, 2011 9:54pm Aug 29, 2011 9:54pm
Quoting forexhard
... One guy says he KNOWS that stops are unneccessary to trading, and the next guys says he KNOWS that they are. Is the one guy just plain wrong, or is he trying to mislead on purpose? .....
That's just it, it's neither one. Different trading styles and timeframes.

Neither opinion is plain wrong or misleading.

It's most important to have an overall plan, and within that plan choose the best entry for your trade. Because there always needs to be a point that, when reached, it shows that the trade is going the wrong way. And whether that means to execute the mental stop, allow the hard stop to get hit, or close and reverse the trade.... is according to each trader's style and overall plan.

Due to all of those variables, (individual trader being the biggest one) these questions can not be answered in one sentence.
  • #25
  • Edited 11:24pm Aug 29, 2011 11:11pm | Edited 11:24pm
Quoting kingsurfer
Apparently you trade with stop loss and it is working for you. 95% of other traders who also trade with a stop loss are not making it. Do you think something is wrong?

I started trading with tight stops. As can be imagined it ended disastrously. Subsequently I gave more room and the results improved. And so on. Presently I have widened the stop loss to infinity. I have become positive since then.

Do you suggest I should rejoin those my 95 friends and start using a stop loss again?

King.
No of course not. What I hate seeing is someone suggesting to a newb,(respectfully the OP), that he trade without stops.

If you trade with stops and they keep getting hit you "should" eventually learn where is the safest place to put them and why.

Red obviously trades in a very complexed way, I am certainly not suggesting that is wrong and kudos to him, I couldn't / wouldn't want to trade like that.

As another poster here said, big money looks for liquidity / stops, and also tries to fake in orders in the wrong direction, our job is to identify those levels. It can be done with consistency and accuracy after a few years of chart study.

Vic Sperandeo's 2b and 123 reversals are a great place to start IMHO. They are typical stop and reverse patterns.
  • #26
  • Aug 29, 2011 11:27pm Aug 29, 2011 11:27pm
I have been trading for a good number of years and the myth that SL's are hunted is rubbish. Yes there are areas of the market were there will be a greater number of orders/SLs and limits and there will always be the person who refuses to use a SL because they constantly find there SL's hit to the pip before the market moves away. SL's are a definition of risk. They are there to protect your account should something go terribly wrong. I would rather see my SL hit 10 times in a row to the pip before moving away, at least there I know my greater judgement was right and the order behaved in the end the way I was planning. The SL got hit, my account suffered some but I live to fight another day. Now imagine black out scenario (or something of that nature) minus SL with volitility in the markets. Imagine 5-10% drop on your leveraged position. It may not happen always but it will happen when you least expect or want it to happen. For anyone who has traded much, seeing a big spike is not an uncommon occurance just as seeing large completed bars heading in the wrong direction to your analysis. Without the Stop Loss there how much damage can be done in a short period of time. What if, and this can happen, your modem falters, your data stream for your charts is interupted, in a subtle way it will look like not much has happened. I have had some connection issues in the past where not complete loss of connection has occured but enough to delay price feeds.

There are a number of ways to go bust and I dont recommend anyone trade without a SL of some kind. If your trading a small TF and scalping then having your finger on the pulse ready to close is ok but not having a SL when position sizes are usually large due to the small SL nature will be dire should an unfortunate situation present itself.

My outlook is that trading without a SL is like sleeping around without a condom, you might be able to pull out before the damage every now and then but should the unfortunate happen and you dont get out then you have the potential consequences that follow. I can really imagine the feeling being the same, that feeling of not knowing.

Everyone is entitled to there opinions.

Take care

RT
  • #27
  • Aug 29, 2011 11:32pm Aug 29, 2011 11:32pm
Quoting the redlion
personally

i can remain objective enough that even if price moves against my position i can interactively manage it.

and if im not day trading and price moves against me, the first question to ask is , is it a directional change or is it in tune with volatility.

stop losses although propagated as a money management tool is not the be all to end all.

one can

press
hold
liquidate
scale in
scale out
average down

its how you manage your trade, that makes you profit. and its the ability to recognize the changing market condition that dictates...
Like I just said how you trade isn't wrong, kudos to you but the stress and effort required just isn't necessary IMO.

20 - 40 minute screentime is all that I require now, find a setup, place your stops and tp, rinse and repeat the next day.
  • #28
  • Aug 29, 2011 11:35pm Aug 29, 2011 11:35pm
Quoting Razor_trader
I have been trading for a good number of years and the myth that SL's are hunted is rubbish. Yes there are areas of the market were there will be a greater number of orders/SLs and limits and there will always be the person who refuses to use a SL because they constantly find there SL's hit to the pip before the market moves away. SL's are a definition of risk. They are there to protect your account should something go terribly wrong. I would rather see my SL hit 10 times in a row to the pip before moving away, at least there I know my greater judgement...
Nice post, love the condom bit
  • #29
  • Aug 30, 2011 3:55am Aug 30, 2011 3:55am
Quoting Razor_trader
I have been trading for a good number of years and the myth that SL's are hunted is rubbish. Yes there are areas of the market were there will be a greater number of orders/SLs and limits and there will always be the person who refuses to use a SL because they constantly find there SL's hit to the pip before the market moves away. SL's are a definition of risk. They are there to protect your account should something go terribly wrong. I would rather see my SL hit 10 times in a row to the pip before moving away, at least there I know my greater judgement...
Thank You, RT.

You gave all the good reasons for using a stop loss. Risk control.

However there are other risk control measures besides stop loss. Stop loss is the most expensive of them all. In fact, I consider stop loss a measure of desperation. You don't want your overleveraged position to made a severe dent on your account!

If you are sizing your trades to the point where you need a stop loss to manage your entire position should an unexpected news,temporary power outage or internet disconnection occur then you are definitely overleveraged and need a stop loss to protect your account from you.

Stop loss is designed to kick you out of a good trade with a loss. It takes the maximum loss of a position.

Give yourself room. Yes this trade is not working out exactly as I envisaged, what options do I have? Wait; take some weight off; temporily freeze the trade (hedge); Average down; stop the whole trade and take the loss; amongst others. You will notice I also included taking full losses but you do it as a last resort, with perfect conviction and at your best time. Not routinely. With time and skill you should rarely need it.

Stop Loss should be your enemy for it is the broker's best friend.

King.
  • #30
  • Aug 30, 2011 4:58am Aug 30, 2011 4:58am
i love the fact that there are so many stoploss haters. i know that over time you will grow more and more confident and your egos will swell. and then some fine day the sun will be shining so bright, the birds will be singing, and you will lose your account for one reason or another but mainly because you can't trade and have no concept of risk control and the inevitable has finally arrived to cash in on your ignorance and arrogance... and your tears will all taste so very sweet. i care not one bit for anyone's reply in defense of their 'elite no stoploss warrior ways (TM)', so have at it. dance monkey, dance!

as for the topic of the thread. dear oh dear. this isn't stock trading with the old pump and dump! besides, who in their right mind is going to be sitting in a 'trading room' taking trades called out to them, or fading trades called out to them. a bunch of penny account losers, perhaps. there's no liquidity in a gang of losers all staring at the same losing trades trading and fading garbage trades over and over.
Congratulations ScalaFX for coming out of the closet!
  • #31
  • Aug 30, 2011 5:03am Aug 30, 2011 5:03am
Quoting nubcake
i love the fact that there are so many stoploss haters. i know that over time you will grow more and more confident and your egos will swell. and then some fine day the sun will be shining so bright, the birds will be singing, and you will lose your account for one reason or another but mainly because you can't trade and have no concept of risk control and the inevitable has finally arrived to cash in on your ignorance and arrogance... and your tears will all taste so very sweet. i care not one bit for anyone's reply in defense of their 'elite no...
So many people have tried to help you and all you can do is act this way. I am speechless.
  • #32
  • Aug 30, 2011 5:07am Aug 30, 2011 5:07am
Quoting kingsurfer
temporily freeze the trade (hedge)
How is it done in Forex?
  • #33
  • Aug 30, 2011 5:47am Aug 30, 2011 5:47am
Quoting duyk20
If your sl is being hit, you r wrong on the trade; so move on to others.
Or maybe you're wrong with your SL.

If you put on a trade for a reason with certain expectations, then the invalidation of that reason or the unfulfillment of those expectations is when you should exit. The expectations may or may not involve having a precise price point at which you consider the trade "wrong".
  • #34
  • Aug 30, 2011 6:15am Aug 30, 2011 6:15am
Quoting nubcake
i love the fact that there are so many stoploss haters. i know that over time you will grow more and more confident and your egos will swell. and then some fine day the sun will be shining so bright, the birds will be singing, and you will lose your account for one reason or another but mainly because you can't trade and have no concept of risk control and the inevitable has finally arrived to cash in on your ignorance and arrogance...
Nubcake,

If every good trader did not use stop loss, your broker friends will have to wait for that one in a million day that one of them will be wiped out.

To others,

Work hard towards eliminating stop loss in your trading and see your profit shoot through the roof. I have not been stop hunted in the last two years because there is no stop loss to haunt. I take losses at my own discretion.

On the other hand I don't compromise with take profit.

King.
  • #35
  • Aug 30, 2011 6:23am Aug 30, 2011 6:23am
Quoting Giansar
How is it done in Forex?
If you are long on the trade and the market become choatic, that is, in an unfovorable or unclear situation , you enter equal lot size short until market returns to familiar territory. It costs you extra spread but your original trade remains intact and you can now sort it out on your own terms. I don't hedge frequently, but its a tool.

King.
  • #36
  • Aug 30, 2011 6:34am Aug 30, 2011 6:34am
Quoting kingsurfer
If you are long on the trade and the market become choatic, that is, in an unfovorable or unclear situation , you enter equal lot size short until market returns to familiar territory.
Heh, I hoped for something more sophisticated
Seems like you could just close the trade in the aforementioned situation and try to get back in at a better price or when PA settles down. This kind of hedging looks more like a psychological stunt than an actual tool giving an edge.
  • #37
  • Aug 30, 2011 6:59am Aug 30, 2011 6:59am
Quoting Giansar
Heh, I hoped for something more sophisticated
Seems like you could just close the trade in the aforementioned situation and try to get back in at a better price or when PA settles down. This kind of hedging looks more like a psychological stunt than an actual tool giving an edge.
I am not a fan of hedging. However, the above situation is one way to hold a trade till favourable conditions.

There is a slight (but significant) difference is our approches. In yours you have finished with the trade (and swallowed a full loss.) You need a new, fresh and strong signal to start a new trade.

In my approach , I have not finished with the trade, its still in progress. I only need a slightly better condition than before to continue managing the trade. The signal does not have to meet all my criteria for a new trade. I may only be looking for the best exit point with reduced loss, break even or even a small profit. These are not good targets for starting a new trade.

Its always better than a full loss at every first opportunity. That's what a classical stop loss is.

King.
  • #38
  • Aug 30, 2011 7:32am Aug 30, 2011 7:32am
Quoting pippin4me
This question has been doing my head in for a while ...

Let's say I'm in a chat room and I call out a price that I buy and I also state my stop loss.

I'm sure in theory that it's possible for another retail trader (or a group) with good liquidity to gun for my stop loss.

What I like to ask if this is a highly probable scenario or am I being too paranoid?

Try to trade with a smaller account, the same will happen...
Just another step towards consistency I guess...
  • #39
  • Aug 30, 2011 7:42am Aug 30, 2011 7:42am
Quoting kingsurfer
There is a slight (but significant) difference is our approches. In yours you have finished with the trade (and swallowed a full loss.) You need a new, fresh and strong signal to start a new trade.
In my approach , I have not finished with the trade, its still in progress. I only need a slightly better condition than before to continue managing the trade.
Thanks for the answer.
For me it is still just psychology (although 'just' may be a vast understatement here). On the other hand - it well may be just my lack of experience speaking.
  • #40
  • Aug 30, 2011 7:43am Aug 30, 2011 7:43am
Quoting kingsurfer
Thank You, RT.

You gave all the good reasons for using a stop loss. Risk control.

However there are other risk control measures besides stop loss. Stop loss is the most expensive of them all. In fact, I consider stop loss a measure of desperation. You don't want your overleveraged position to made a severe dent on your account!

If you are sizing your trades to the point where you need a stop loss to manage your entire position should an unexpected news,temporary power outage or internet disconnection occur then you are definitely overleveraged...
Well said and fair enough. Each to their own devices. If I am trading a timeframe of anything less than 4 hourly it is because I am looking at a point where I think the market will turn, therefore my position is not neccesarily overleverage or over risked but if the market doesnt react to where it could turn then I walk away. There are times when the position size is considerable because of the nature of the trade, the SL is directly below a point that would invalidate my thoughts and I am happy to take a loss at the opportunity. If I am correct then my position size rewards me well. It is not a situation were I would walk into without a SL because of the nature of the trade itself. A power outage with this position size regardless of my mental stop and a big push against the position would be disastrous.

Saying that trading anything on the daily or the weekly then scaling, hedging, pyramiding whatever it may be is an option as the moves you are looking for a much larger and over a much greater period of time. You are looking to build equity positions therefore you allow a much greater tolerance. Unless you have a power outage that last a week then there is not too much damage that can be done, unless of course it is the same week the the crisis country's all default and the market turns to shit.

I respect all the comments made. I trade my way, it works for me and I am comfortable with it. Others trade very differently and if there alive (account wise) in a few years from now then they are a survivor and will most likely continue to do so.

Take care

RT
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