I Stopped Using Stops

[wallstreetwarrior87]

Hi tar,
Those that scale in, average down or dollar cost average etc. will be looking to manage the trade in a way that gets them out at break even at worst or, hopefully, with a profit.
Tim.

Not always, sometimes this is done to reduce the loss rather than simply dumping at a specific price.

All of this is to do with managing risk and this is what has been lost in the many posts on this thread. Which I agree was not the intention of the opening poster, but it has still developed into an interesting thread, as there have been no slanging matches (so far :cheesy

 

[Anon1]

Its either you trade the FTSE :

1- With leverage : then you need some sort of a stop as you cant survive holding it all the way down .

2- Without leverage : Then you wouldn't be able to make 20-30% pa .

Hi Tar,

I'll leave you to work out the detail if this is your bag of course. Naturally if one was to go through the amount of swings the FTSE100 has made (on a large scale) over the last 17+ years then one would see that using a moving average and entry/exit of aprox 75-100 pts then one would be considerably profitable (given the use of strict money management and leverage as appose to being reckless and attempting to achieve double their money in 1 year). However all is the same with regards to the main population changing their minds or more to the point, giving them the possibility of earning money from the markets way above the sit and hold strat and yet it will still be debated as a no go from the start. Mainstream do not seem to understand that over or reckless or unreasonable leverage will kill their account at some point.

Like I have maintained from the beginning, I am an individual who looks upon a way to achieve things as oppose to concentrating or bringing up the many ways in which something cannot be achieved.

I think I'm all done here on this thread, the conversation has been enlightening as to peoples behavior and somewhat reluctance in seeing the woods from the trees so to speak. It was also refreshing that the thread has not gotten inflamed with rage from closed minds.

I feel it has to be mentioned that from what I see, nothing has changed with respect to people wanting to take a sum of money less than 50k and trying to make a living wage from it. At least that's what the snake oil salesmen will sell each day and people want to believe its true. The reality is of course that it isn't.

All the best on this one,
Anon

 

[tar]

One of the problems with scaling in is if you scale in in equal distances ie every 100 points , the price needs to retrace 50% from your last entry to just get you back to break even , thats really annoying and stupid ...

 

[darktone]

Re hedging : Dont want to open a whole debate here but if you are long Dax at 12000 and at 11800 you decided to make a hedge and short the Dax , thats a stop loss . It doesn't matter what type of order you used , at the end you did offset your loss .

Thats not quite true in my view. Ur long dax 12000 and 11800 you decided to hedge.
Stop at 11750 or limit 11850.
The stop seeks further loss and the limit seeks less loss (value).
-250 or -150.
I think that matters.

No

Besides these guys being complete tarders in full sense of the word. Market ticks -500. Stop fired, trader is out.
Market then ticks -400, -300, -200.
Get it? I guess not.

 

[darktone]

Correct, that is the way it should be. Trading is a profession that must be learned properly, it isn't an activity intended to provide something fun and new every month. How many more successful traders would this site produce if more people who come here understood this simple fact.

But what is properly? The way youve learnt it? Lets face it,Socrates wernt that great was he
Fascinating
Can I have some
wooow
Disciple

You do what you always did and get what you always got, or you can evolve and improve as your understanding allows.

 

[darktone]

Hi tar,
Like you, I don't want to take the thread off topic by discussing hedging. That said, I don't view hedging as a type of stop loss as the original trade remains open and the loss will continue to mount - even though a corresponding gain will be accruing in the hedge trade. Those that scale in, average down or dollar cost average etc. will be looking to manage the trade in a way that gets them out at break even at worst or, hopefully, with a profit. That's a very different proposition from the trader who is taken out of a trade when their stop loss is hit and the loss is realised. Not better necessarily (potentially a lot worse some would say), just different. Just my $0.02 worth of course.
Tim.

Its not quite like that for me. Seeking value is the goal. If Im positioned and the market moves 100 against and I improved my average by 95, but booked -40 thats great. If I do the same and book -10 thats better.
BE / profit are irrelevant as such. Sometimes if market action allows then they are simply the result of seeking value.

Any extra trades I take, usually against the direction of the original position may offset any scratched losses taking from positioning.
Ie final ave short 100 (previously 50)
Scratched loss -25
Hedge trades +30
Then im up 5 for the day (not inc any floating profit) and positioned at the HOD.

To me its all about get that position on at best prices with as least damage as I can.

 

[darktone]

All of this is to do with managing risk and this is what has been lost in the many posts on this thread.

yep

 

[new_trader]

I am aware of the futility of trying to change any person's mind, let alone yours. One thing I am smart enough to realise is that I'm not smart enough to know everything. That said I will rely on the wisdom of others to answer your questions, they are especially fitting for this thread.

But what is properly? The way youve learnt it

The phenomenon of a person in deep trouble, who indignantly rejects the only thing that can help him, is observed in every field of endeavour.

-E. Jaynes

Human beings, who are almost unique in having the ability to learn from the experience of others, are also remarkable for their apparent disinclination to do so.

-Douglas Adams

You do what you always did and get what you always got, or you can evolve and improve as your understanding allows.

Those who are enamored of practice without theory are like a pilot who goes into a ship without rudder or compass and never has any certainty where he [sic] is going. Practice should always be based upon a sound knowledge of theory.

-Leonardo da Vinci

 

[tar]

I am aware of the futility of trying to change any person's mind,

The market always takes care of this period .

 

[darktone]

Lol. You dont think the first two might be directly applicable to you?

Personally , I prefer this.

"When I left him, I reasoned thus with myself: I am wiser than this man, for neither of us appears to know anything great and good; but he fancies he knows something, although he knows nothing; whereas I, as I do not know anything, so I do not fancy I do. In this trifling particular, then, I appear to be wiser than he, because I do not fancy I know what I do not know"
Socrates (Not your buddy)

As for the trading theory. Ill try and nab that from some of the most successful traders of our time, rather than some dude off T2W

 

[darktone]

The market always takes care of this period .

The market takes care of every trader and gives them exactly what they want.
If the market is a 50 and the trader wants to sell 25 / buy 75 then its always willing to help them out.

 

[counter_violent]

Its not quite like that for me. Seeking value is the goal. If Im positioned and the market moves 100 against and I improved my average by 95, but booked -40 thats great. If I do the same and book -10 thats better.
BE / profit are irrelevant as such. Sometimes if market action allows then they are simply the result of seeking value.

Any extra trades I take, usually against the direction of the original position may offset any scratched losses taking from positioning.
Ie final ave short 100 (previously 50)
Scratched loss -25
Hedge trades +30
Then im up 5 for the day (not inc any floating profit) and positioned at the HOD.

To me its all about get that position on at best prices with as least damage as I can.

Now we're getting somewhere. The mention of hedging trades is key to playing the random walk game.

Random walk using small stakes and limit TP will produce better than 70% of trade outcomes, dependant on a reasonable time horizon to close out in profit.

This is not to say that your 70% winners will produce enough profit to counter these DD outlier rouge trades.


The problem is how to deal with these trades that go opposite and show adverse directional movement as opposed to normal market price gyrations.

I have solutions, but would prefer to see others comments in the first instance.

 

[new_trader]

Surely the whole purpose of T2W is have discussions like this and questioning conventional wisdom from time to time is no bad thing.
Tim.

As for the trading theory. Ill try and nab that from some of the most successful traders of our time, rather than some dude off T2W

I suppose darktone has answered your question Tim.

 

[darktone]

Now we're getting somewhere. The mention of hedging trades is key to playing the random walk game.

Random walk using small stakes and limit TP will produce better than 70% of trade outcomes, dependant on a reasonable time horizon to close out in profit.

This is not to say that your 70% winners will produce enough profit to counter these DD outlier rouge trades.


The problem is how to deal with these trades that go opposite and show adverse directional movement as opposed to normal market price gyrations.

I have solutions, but would prefer to see others comments in the first instance.

CV. I really couldnt comment mate. Im directional for the vast part and seeking value No1 concern.
Bearing in mind im not purist tape reader who uses precognition to perfectly time entries and exits. I asked myself "how can I nail 'the' exit after ive worked the entry? Why not just do the opposite of what you did to discover the entry!?" So I did, and although labour intensive and brand new to me , it worked out quite well.

Its not hard to imagine employing the same type of play over a longer tf. Might even be able to that squeeze a non levered 30% out of that 10% move if the market and trader allow

 

[hhiusa]

CV. I really couldnt comment mate. Im directional for the vast part.
Bearing in mind im not purist tape reader who uses precognition to perfectly time entries and exits. I asked myself "how can I nail 'the' exit after ive worked the entry? Why not just do the opposite of what you did to discover the entry!?" So I did and although labour intensive, it worked out quite well.

Its not hard to imagine employing the same type of play over a longer tf. Might even be able to that squeeze a non levered 30% out of that 10% move if the market and trader allow

Do you only trade in one financial instrument?

 

[darktone]

Do you only trade in one financial instrument?

For the most part. I do trade other stuff from time to time tho.

 

[hhiusa]

For the most part. I do trade other stuff from time to time tho.

Why do you only trade DAX index? "Don't put all your eggs in one basket".

 

[darktone]

Why do you only trade DAX index? "Don't put all your eggs in one basket".

I just follow the Dax around. Im not concerned.

 

[hhiusa]

I just follow the Dax around. Im not concerned.

Very interesting! What are not concerned with?

 

[darktone]

Very interesting! What are not concerned with?

Nothing. You?