Anyone use very tight stop losses successfully?

simcom said:
I use extremely tight stops. Consequently my ratio of profitable to losing trades is terrible, but I make up for it with their average sizes.

Problem with such a strategy is that it isn't to the tastes of many people. When I started I found it psychologically very difficult to deal with the long runs without a win.
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simcom said:
Sorry, just realised that I forgot to answer that originally.

Averages out at around a 5:1 ratio of profit:stop size (all losing trades are hit the stop).
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Excellent stuff !

You either are or you are on your way to becoming one very rich man !
 
tar said:
2-3 pip stop I think it is not doable at live trading if u use Abn or Oanda ...
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tar this is what Maggi did at ABN via manual executions, 1 pip spread quite regularly on this pair:

file.php


Effective, simple, robust and profitable momentum trading.
 
That is true tar, Maggi said so himself.

They let him scalp trade this way quite a long time also in his real accounts where he worked some magic too, but at some point started making it harder for him.

Accordingly he said he was going on to a direct access broker.

But that is what I keep saying: the strategy as such works perfectly, but you do need a direct access broker if you want to keep doing this long term.
 
BSD said:
Excellent stuff !

You either are or you are on your way to becoming one very rich man !
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Hopefully (y)

Though I don't have any idea when I can resume trading it yet. Wouldn't want to try in this current volatility!
 
BSD said:
That is true tar, Maggi said so himself.

They let him scalp trade this way quite a long time also in his real accounts where he worked some magic too, but at some point started making it harder for him.

Accordingly he said he was going on to a direct access broker.

But that is what I keep saying: the strategy as such works perfectly, but you do need a direct access broker if you want to keep doing this long term.
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Do u know how much the size of his trades ? did he tried Oanda or Abn only , Oanda desk told me that they dont care if we scalp fairly !
 
Actually RE OAnda scalping should work there, as I know some systems traders who have accounts there where they scalp via API's.

Also Richard Olsen and Michael Stumm, the cofounders, themselves are into high frequency data driven trading models in their hedge fund.

So should be OK.
 
JTrader said:
magellan2 did/does. 2-3 pips(?)...5500% in 1 month...
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Quote:
Originally Posted by BSD
OK, this was admittedly on a demo account, but that is still what Magellan achieved over 3000 trades in one month at ABNAMRO's shyly named Heroes become Legends trading challenge:

1 Magellan 54.905,52 %
https://www.abnamromarketindex.com/d...pielstand.aspx

And it's no fluke either, he is also in real life with real accounts an extremely successful short termscalper who has been around several other trading boards for quite some time.

You can have a look at some of his trades here that he did outside of the challenge.

Click on his pics to open them up bigger.

SR Trading - Forum - Börsenforum • Thema anzeigen - Der heilige Gral ?

Like I said earlier, anybody who is daytrading or scalping with less than say a hundred mill or so is really doing something wrong if they don't average out at around .5 or 1% / trading day.

take a look at the link.
looks to me like there may have been a problem with the software during the competition. first place gets 54000% return and coincidently second place gets 53000% the rest are 3000 and less. similar thing happened with this sites competition. guy in 100th place doesnt seem to have made a trade at all and is up 50%
 
refering to this competition has no meaning. but it is abundantly clear that tight stops work for some people ubt is not viable for most strategies
 
tightstops said:
refering to this competition has no meaning. but it is abundantly clear that tight stops work for some people ubt is not viable for most strategies
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Indeed it also depends on what pairs you use it.
some pairs are way to volatille to use a tight stop loss.
 
dcraig1 said:
Stops - the most difficult issue in trading, at least IMHO.

How tight your stops are, surely is dependant on how good entries are. Attached is a chart of this mornings Aussie API with an example of a very good entry where a very tight stop would have been appropriate. No - I didn't take the trade - I was out this morning. I don't believe that there is any dichotomy between tight stops and logical stops. Trades should only be taken where tight stops are appropriate.

The chart is a constant volume 50 contracts per bar. The black line on the price plot is VWAP. The second from top plot is a smoothed "market delta" - difference between trades executed at ask and at the bid. Third plot from top is smoothed "order book delta" - the ratio all contacted offered in the book (5 levels) to all contracts in the book (10 levels). The latter has a range 0 to 1.

Lower plot shows a couple of smoothed CCIs.

Notice the change in supply and demand during the bounce off the VWAP. Number of trades at the ask rises sharply as does the number of contracts offered. Remember that markets generally move to liquidity.

VWAP is an important S/R point for many SIFs. The CCIs are oversold, and for most of the preceeding period the high order book delta is indicative of a bullish market.

Put all of these together and it seems clear that a tight stop is very appropriate.

For anybody taking the drivel on the TRO threads seriously, compare and contrast this chart to the rubbish over on those threads.
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Finally - the chart:
 

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A stop can be tight upon immediate entry, but that's just one approach. If your approach is based upon hitting a zone sandwiched between various prices then stops are used differently but within a tight risk/money management scheme, so your stops are 'tight' to your risk area. As i've mentioned before, stops are just another order type to be used, so use them in a realistic manner to your own proven approach, style and market conditions. You shouldn't be using stops as a weapon to attack other posters on chat forums, that's not really what a stop order is for....hehehe.
 
Paul71 said:
A stop can be tight upon immediate entry, but that's just one approach. If your approach is based upon hitting a zone sandwiched between various prices then stops are used differently but within a tight risk/money management scheme, so your stops are 'tight' to your risk area. As i've mentioned before, stops are just another order type to be used, so use them in a realistic manner to your own proven approach, style and market conditions. You shouldn't be using stops as a weapon to attack other posters on chat forums, that's not really what a stop order is for....hehehe.
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you are correct:D
Annyway a to tight stop loss isn't good as well, the price has to have a little bit room to move.
but this also depends on what pair you'll be using.
Some of them are way to volatille to use a close stoploss.
 
Type

wouste said:
you are correct:D
Annyway a to tight stop loss isn't good as well, the price has to have a little bit room to move.
but this also depends on what pair you'll be using.
Some of them are way to volatille to use a close stoploss.
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Couldn't agree more. E.g the yen is probably one of the most volatile forex currencies imho, along with crude. So I certianly wouldn't have too tight a stop on those. Whereas, the eurgbp for example doesn't move that much and I would recommend a tighter trailing sl.
 
Way to improve your chance of success in the short term is to use no stops. Go one, try it.
 
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