Hi JRP2891 - Yes I see where you are coming from with trailing stops. I'm certainly not saying that wouldn't work. I'm not dictating to anyone how to trade here, simply trying to point out that cutting losers and running winners can be a good strategy. It's up to the individual what that means to them and how they implement it in their trading, if at all.
For me, my experience with trailing stops has been almost universally frustrating. In the situation you describe, yes I might have bagged 1,000 pips. But what if the market touches that trailing stop and then reverses to go 10,000 pips into profit? I am not prepared to take that risk. The opportunity cost is too great for me. I want to give every trade the best possible opportunity to last for years. For me that means not closing out until it turns negative. But each to their own, if you want to use trailing stops by all means do so!
Hi advfntrader - thanks for your comment. You have touched on something very important; i.e. "just let the market take you out". Do not isolate your thinking to one trade or one pair. I take longs and shorts, majors and minors. If one trade gets stopped out at B/E having been 1,000 pips in profit, I will most likely have a long coming up from somewhere below, possibly on the same pair, maybe on a different pair. That's my interpretation of "letting the market take me out". Very insightful comment, though, thanks.
Hi tomorton - your comment struck a real chord with me, not so much from a technical trading point of view but from a philosophical dimension. This is the quote:
"run winners and cut losers is more an aspirational thing, such as 'make profit and don't lose money"
Do you aspire to be profitable? Hope to be profitable? I'll tell you what I do. I decide to be profitable. There's a huge difference.
Aspiration leaves too much room for failure. "Ah well maybe it wasn't meant to be".
Feck that. I'm going to be profitable. Shout it from the rooftops. Your behaviour changes. You start doing things consistent with becoming profitable. This goes for anything in life. Decide to drive the car; Decide to get the girl; Decide to nail this trading lark and make it work.
Many people have discussed the power of making a decision. The psychologist I referred to above and Will Smith are the two that spring to my mind, I am sure there are others.
http://youtu.be/OVFZ7kJIbsE
Good trading to all.
Nigel
For me, my experience with trailing stops has been almost universally frustrating. In the situation you describe, yes I might have bagged 1,000 pips. But what if the market touches that trailing stop and then reverses to go 10,000 pips into profit? I am not prepared to take that risk. The opportunity cost is too great for me. I want to give every trade the best possible opportunity to last for years. For me that means not closing out until it turns negative. But each to their own, if you want to use trailing stops by all means do so!
Hi advfntrader - thanks for your comment. You have touched on something very important; i.e. "just let the market take you out". Do not isolate your thinking to one trade or one pair. I take longs and shorts, majors and minors. If one trade gets stopped out at B/E having been 1,000 pips in profit, I will most likely have a long coming up from somewhere below, possibly on the same pair, maybe on a different pair. That's my interpretation of "letting the market take me out". Very insightful comment, though, thanks.
Hi tomorton - your comment struck a real chord with me, not so much from a technical trading point of view but from a philosophical dimension. This is the quote:
"run winners and cut losers is more an aspirational thing, such as 'make profit and don't lose money"
Do you aspire to be profitable? Hope to be profitable? I'll tell you what I do. I decide to be profitable. There's a huge difference.
Aspiration leaves too much room for failure. "Ah well maybe it wasn't meant to be".
Feck that. I'm going to be profitable. Shout it from the rooftops. Your behaviour changes. You start doing things consistent with becoming profitable. This goes for anything in life. Decide to drive the car; Decide to get the girl; Decide to nail this trading lark and make it work.
Many people have discussed the power of making a decision. The psychologist I referred to above and Will Smith are the two that spring to my mind, I am sure there are others.
http://youtu.be/OVFZ7kJIbsE
Good trading to all.
Nigel
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