I Stopped Using Stops

[darktone]

Noooo ! Why ?! No stops thats why , no exit plan thats why .

This guy was number 1 in zulutrade for years , he ruined many lives .

So he has no stops, no exit plan, and he averages down, and holds till the trade shows a profit. Then thats inevitable!
He thought he could do this kinda shìt and get away with it forever

As for ruined lives. Where did the blame lay? With the trader? Or with the punters who chose to give up responsibility for their capital to someone else?

 

[0007]

Some people have mentioned 'black swan events' as the reason why you should always have a stop in place.

Well, I happen to have this response for them:

A non-guaranteed stop can be barely worth more than the pixels seen on screen, during a true black swan event.​

How can I say that?

Let's just say I've been at this long enough...

I wouldn't disagree with that. As I see it the problem is that non-guaranteed stops are reasonably okay and a sensible precaution under normal market conditions (slippage, fast moving market et cetera et cetera obviously will degrade that) whereas guaranteed stops because they are really only useful under Black Swan conditions are not a cost effective option. This "stop situation" is one of the reasons I now only trade short where the typical market black Swan (as opposed to an individual stock) situation works advantageously within my particular trading strategy. Can't speak for forex since I only trade SP 500 stocks.

 

[darktone]

Tar,

The difference, as I understand it, is that those traders didn't know that they didn't know shіt!

Im impressed! They thought they knew something.

They thought that could hold any trade till profit.
They thought they could average down and get bigger and bigger and bigger.
They thought they could abuse risk.

But thats just technical side. They were probably completely unaware of the psychological side. No notion of the terror forming in their minds that caused them to it all up at the worst possible moment. Perhaps with stop order, 2 ticks from the low.

I goto hand it to you man. You got that 100% dead right! (youl be glad to know). Im gona have to like your post!

 

[new_trader]

Consider the following:

1. A trader with 10+ years experience trading with stops. This trader strongly advocates using stops because of their very early experiences trading without them. This trader has 10+ years experience trading with stops.
   
2. A trader with approximately 13 years experience trading with stops. This trader has only been trading without stops for approximately 18+ months because of their lack of success trading with stops. This trader now advocates not using stops.

No matter how I look at this, I can’t see how you can have any credibilty, not yet anyway. If you are still advocating trading without stops in 10 years time then perhaps I will give you the benefit of the doubt.

 

[darktone]

If I were to read through all the posts you've made on trade2win prior to 03/02/14, would I find the same cocksure attitude about your trading ability as you are displaying since 03/02/14?

The only thing I am confident about mate, is that I am (and hopefully will continue to be) the master rather than the victim of my mind.

If you read through very early posts youll find someone who thinks they know something, uses stop, all over the TA. Youll find someone who wants fit in, be liked. Someone who thought being right was important.

Recently, you might see that ive free'd up a touch in my posting style . Im not here to be liked, or to fit in. Im here to learn.

 

[tar]

From 26/06/15 to end of play today:-

Winners: 229 trades (50.9%)
Loosers : 221 trades (49.1%)

Starting balance: £2420.34
End Balance : £2632.24
Profit : £211.90 (8.7%)

As for what I see as important in trading. Id say to generate as much profit as possible with the least risk.

The fact that you have managed to make 8.7% in one week by taking "small trades" and averaging down speaks volumes ! Your risk is enormous , your MTM max DD is 40-50% and your future max DD is 100% . You are not trading tiny size mate .

 

[darktone]

Neither

Lard Jebus

Belief hove albion, 1
What is utd, 0

 

[Forexmospherian]

The only thing I am confident about mate, is that I am (and hopefully will continue to be) the master rather than the victim of my mind.

If you read through very early posts youll find someone who thinks they know something, uses stop, all over the TA. Youll find someone who wants fit in, be liked. Someone who thought being right was important.

Recently, you might see that ive free'd up a touch in my posting style . Im not here to be liked, or to fit in. Im here to learn.

Once you get over your first learning phase - whether it be 2 or 4 or more years - the longer than you are actively trading ie over 7 yrs - 10 yrs - 15 years + the more you should learn and in theory - the more successful you should be.

We would all expect a traders results after say 10 yrs to be better than that trader achieved after year 3 or 5.

Darktone - if your trading performance/ results now after 15 yrs are better than after say 6 or 8 yrs when using stops - then that's good but has Tar quite rightly has mentioned the real test will be maybe after 4 or 5 yrs of not using stops - and still having your same account showing as lot more money being made

GL

Regards


F

 

[darktone]

Consider the following:

1. A trader with 10+ years experience trading with stops. This trader strongly advocates using stops because of their very early experiences trading without them. This trader has 10+ years experience trading with stops.
   
2. A trader with approximately 13 years experience trading with stops. This trader has only been trading without stops for approximately 18+ months because of their lack of success trading with stops. This trader now advocates not using stops.

Let me help with my general story.
A trader who has been trading for 15 years, who lost big the first couple o years, broke even the next few years, started to make some gains but very erratic, then some quite reasonable gains but still erratic, started to question what he thought he knew.
Was a slippery slope from there out. Till very recently, that although profitable and not using stops so much, could see a huge potential and profit gap (Funny how running a thread can do that eh).
I had no choice but to re-evaluate, as what I was doing didnt make sense to me anymore.
Now im here, evolving.


No matter how I look at this, I can’t see how you can have any credibilty, not yet anyway. If you are still advocating trading without stops in 10 years time then perhaps I will give you the benefit of the doubt.

Im not here for creditability, im here to learn.
10 years it is.:clover:

 

[darktone]

The fact that you have managed to make 8.7% in one week by taking "small trades" and averaging down speaks volumes ! Your risk is enormous , your MTM max DD is 40-50% and your future max DD is 100% . You are not trading tiny size mate .

Averaging down and scaling in out are not the same thing.
Averaging down and scaling in out are not the same thing.
Averaging down and scaling in out are not the same thing.
Averaging down and scaling in out are not the same thing.
Averaging down and scaling in out are not the same thing.

can you read this?

Averaging down and scaling in out are not the same thing.
Averaging down and scaling in out are not the same thing.
Averaging down and scaling in out are not the same thing.
Averaging down and scaling in out are not the same thing.
Averaging down and scaling in out are not the same thing.

Its kinda cloudy when strong beliefs cloud what is.

Averaging down and scaling in out are not the same thing.
Averaging down and scaling in out are not the same thing.
Averaging down and scaling in out are not the same thing.
Averaging down and scaling in out are not the same thing.
Averaging down and scaling in out are not the same thing.

 

[tar]

There is no problem with scaling in/out at all . However scaling in without a SL thats what i have a problem with , these screenshots are for traders who scale in without a clear SL .

 

[tomorton]

"Averaging down and scaling in out are not the same thing." - Obviously. As long as you're scaling into a winning position. I think we should all agree scaling into a losing position is averaging down.

 

[paszkman]

"Averaging down and scaling in out are not the same thing." - Obviously. As long as you're scaling into a winning position. I think we should all agree scaling into a losing position is averaging down.

I disagree.
You can scale into a position at a better price than you first entered the position.
If you liked it 100 you'll love it at 90!

 

[tomorton]

I disagree.
You can scale into a position at a better price than you first entered the position.
If you liked it 100 you'll love it at 90!

Unless that's a joke, you don't disagree. I thought my statement was too obvious but could have been worth posting just to be clear that we're all on the same page. And we are, though you don't think we are.

Buying lower at 90 is averaging down, so the average price goes lower, to 95 instead of 100. Except you've now doubled the %age of your account exposed to this trade.

 

[tar]

If you liked it 100 you'll love it at 90!

Not necessarily it depends on your trading method .. some may love it at 110 .

 

[darktone]

There is no problem with scaling in/out at all . However scaling in without a SL thats what i have a problem with , these screenshots are for traders who scale in without a clear SL .

Open positions -3200 pips. Do you think this guy knows what managing a trade is?
Listen, I scale in, then scale out of the trades I dont want, to get back down to the size I want.
These guys dont do that.

 

[darktone]

"Averaging down and scaling in out are not the same thing." - Obviously. As long as you're scaling into a winning position. I think we should all agree scaling into a losing position is averaging down.

I agree, lets call adding positions to existing losing positions at lower prices, averaging down.
What shall we call getting out of the positions we dont want? what I mean is the positions that I scratch to get back to the size I want.

Btw. Have you ever considered your role in the market? As one of the participants I mean.

 

[darktone]

Not necessarily it depends on your trading method .. some may love it at 110 .

That true, depends on your method

 

[Forexmospherian]

Open positions -3200 pips. Do you think this guy knows what managing a trade is?
Listen, I scale in, then scale out of the trades I dont want, to get back down to the size I want.
These guys dont do that.

Hi Darktone

I would agree with you on this part - P&Ping or scaling in and out every 50 -150 pips can work wonders if you can read intraday prices well.

But if you can read intraday moves well - you just get your timing right and buy at interim lows and sell at interim highs - all depending on how much time per day you have and how many trades you want to take

My - mate Marius the Private Fund guy as been even 5000+ pip out and still had an account making money - BUT his annual results - although positive - still are fairly low - normally around 15% -35% per annum - many would say that is good with a Capital Account size of $1 million +

I notice you might be taking 400 -500 trades per week - ie 80 -100 per day - a lot of trades - even if many just over a few minutes - with the possibilities of slippage ( both ways) on ever trade and a lot of trade management required

I guess you put in a 5 - 8 hrs + day - for that amount of time and effort surely 2% + a day is on ( non compounding ) - what ever way you play ?

Regards

F

 

[darktone]

Hi Darktone

I would agree with you on this part - P&Ping or scaling in and out every 50 -150 pips can work wonders if you can read intraday prices well.

But if you can read intraday moves well - you just get your timing right and buy at interim lows and sell at interim highs - all depending on how much time per day you have and how many trades you want to take

My - mate Marius the Private Fund guy as been even 5000+ pip out and still had an account making money - BUT his annual results - although positive - still are fairly low - normally around 15% -35% per annum - many would say that is good with a Capital Account size of $1 million +

I notice you might be taking 400 -500 trades per week - ie 80 -100 per day - a lot of trades - even if many just over a few minutes - with the possibilities of slippage ( both ways) on ever trade and a lot of trade management required

I guess you put in a 5 - 8 hrs + day - for that amount of time and effort surely 2% + a day is on ( non compounding ) - what ever way you play ?

Regards

F

What you mean P&Ping F?
Cant say I read prices well F. Just sell when prices are high and going higher and buy when prices are low and going lower. As per the examples. You know how it worked, not hard is it.

I agree with the view about your friend. I wouldnt want to trade that way. Makes no sense when you can manage size. Its hold and hope at the end of the day isnt it. If youre small and the market doesnt totally spaz then it should work out ok but the returns as you say are low. Id guess he draws down a good whack too.

450 trades over 9 days was the number. You have to remember this the play account where I test. Id rather swing trade. Day trading is great practise for me tho. Gives plenty of round turns to explore ideas and test psych.
Only get positive slippage F, im a limit trader. Managing Is easy enough, you just put the limits out ahead of the price and wait for the dings to start. No need to watching every tick unless youre in play. even then I dont watch every tick. lol

2% on acc is certainly doable, depends on appetite for risk. The example I just did was sized 0.20. dax at 11100 x 0.20 = 2220. The account is 2630! so bigger than notional size lol. Max size taken on managing was 0.40. -6000 pts would be a hellova tick no . Being hedged in that example youre only at that extra risk while discovering the lows, for the seconds or minutes while you get em on and scratch em out. Then your back in the hedge. All interesting stuff to explore, if youve a mind to.