Is stop loss hunting avoidance worth it?

[counter_violent]

They will face the same dilemma to decide when and where they hedge/release the hedge .

Well not really.

On a single trade with stop and target, it's a binary outcome. Win or lose.

With multiple positions in any direction, at some point they can expect to be in profit overall at some point. Almost impossible not to be.
The exact opposite of a casino, where, the longer you play, the less likely you are to win.

 

[tar]

Well not really.

On a single trade with stop and target, it's a binary outcome. Win or lose.

With multiple positions in any direction, at some point they can expect to be in profit overall at some point. Almost impossible not to be.
The exact opposite of a casino, where, the longer you play, the less likely you are to win.

Another thread about hedging ?

 

[counter_violent]

Another thread about hedging ?

Just trying to be practical and get people away from their rigid binary thinking.

But like everything, you can point them in the right direction. Whether they go that way is up to them. I couldn't give a toss

 

[Signalcalc]

Just trying to be practical and get people away from their rigid binary thinking.



But like everything, you can point them in the right direction. Whether they go that way is up to them. I couldn't give a toss

The concept of hedging as a retail trade strategy is interesting, got any links that expand on the ideas? Tks.

 

[counter_violent]

The concept of hedging as a retail trade strategy is interesting, got any links that expand on the ideas? Tks.

No , sorry. I worked out a system that suits me. It all revolves around the interconnectedness of markets. Multiple instruments. It's not hard to figure out, but I suspect many are too lazy to even bother trying.

 

[Signalcalc]

No , sorry. I worked out a system that suits me. It all revolves around the interconnectedness of markets. Multiple instruments. It's not hard to figure out, but I suspect many are too lazy to even bother trying.

No problem, I was after some general info only to add to my educational library [emoji38] you've shared already by mentioning the use of multiple instruments, so that's good enough for me [emoji6]

 

[tar]

The concept of hedging as a retail trade strategy is interesting, got any links that expand on the ideas? Tks.

Usually when retail traders - not speaking about cv - mention hedging they mean long dow and short dow ,or long euro and short euro ! :whistling

 

[counter_violent]

No problem, I was after some general info only to add to my educational library [emoji38] you've shared already by mentioning the use of multiple instruments, so that's good enough for me [emoji6]

It's not that I won't have the discussion, it's the dissers I can't be bothered with.

So, we take a trade and it goes offside. Then the course of action open to us is to oppose this offside trade. We can take profits on either side of the equation at any time. We can bias either side of the equation at any time. As price rolls forward we are presented with up to date useful price information, with which we can make trade decisions going forwards, independent of our historic (still live) positions. Sometimes a new position will help the overall, and sometimes it will not. Each trade point can either help or hinder the overall position.

The One rule in all this chaos is. It's fine to average a position, but only if you are prepared to take the opposite side by an equal, or greater amount (bias stake).

So the discipline in all this is, even when you are closed out on One side, you must be disciplined and fully prepared to oppose all open positions as and when the price action dictates. If you continue averaging One side only, you will lose. If you stay disciplined, you will win.

 

[dbphoenix]

Hi,

I've read some articles that say that one of the ways to avoid having your stops taken out by stop hunters is to widen your stops, thereby keeping them away from where hunters would expect the large pool of stop losses to be. For example, on a reversal trade, since hunters expect the pool of stops to be within, say, 10 pips of support or resistance, set your stop 15 pips away.

The issue: On the one hand, by widening your stop, it might be missed by the hunters more often than otherwise and you'll stay in more trades instead of losing your stop loss cash value each time. On the other, each time you widen your stop you're reducing your pip value; so if you win the trade, you'll end up with less profit.

Question: Which would be better in the long run, to place stops in the expected place and get stopped out by hunters more often while earning more on the trades you win, or to widen your stops, thereby keeping you in more trades, but earning less on each of those trades?

Thank you,
Norm

Widening your stops is perhaps the worst thing you can do, particularly if you haven't determined the likelihood of that wider stop being hit after all, making your loss that much bigger.

The whole stop-running thing is a boogeyman designed to keep the small retail trader off-balance and should not even enter into your calculations. Quite simply, you should place your stop at that point or level which, if reached, will tell you that the assessment you made before entering the trade in the first place, including the location of your stop, was wrong. There can be many reasons why you were wrong, some under your control and some not. What matters most is that you not argue with the market.

Determining the criteria which will help you assess any given trade along with the proper stop placement will depend on the instrument you trade, whether you trade trends, scalp, enjoy a stop-and-reverse surfing style, how much capital you have available, how fearful you are, and so on. Articles, which generally are written by people who have learned all they know about trading by reading articles, are not likely to be of much help.

 

[darktone]

The concept of hedging as a retail trade strategy is interesting, got any links that expand on the ideas? Tks.

Its not so much hedging as it is to seek value. Trading tops and bottoms is impossible except that its not. You can buy - manage - and end up with an averaged position near the bottom of the market. Not a huge leap from here to realise you can do the same to the short side as prices go up. Net result is you have an averaged long and short position at the top and bottom of the market, which providing you done a half sensible job at managing ya shiz will show a profit (sometimes better than final position). Of course it doesnt matter if ya nedged in the same instrument or hedged in a different whatever. You have two sets of comish to pay which seals its fate for most but you can trade out favourably of course. No need to have a view of direction as youre just fading the moves.
Just approach of many.

The biggest problem youll have will likely be....

 

[tar]

If trader X is buying and averaging down in fixed size and in equal distances for example buy 1 lot every 100 pips , then it is impossible to always have the average entry price near the bottom , it will be exactly in the middle between the first entry and the last one , one would need 50% retracement just to get back to BE .

Ofcourse there could be another version of averaging down , for example first buy every 100 pips then buy every 50 and so on, while increasing size more aggressively all the way down just to try to make the average entry near the bottom , but that wont work every time , at some point you will run out of fuel before seeing the bottom , which will keep your average entry hanging up there way off the bottom . Not to mention the steep drawdowns you will suffer just to get back to BE .

Which brings me to the old saying : martingale works if you have unlimited money .

All of this is just to avoid taking a loss of few pips in the first place while being ok with taking the same amount as profits .

 

[counter_violent]

If trader X is buying and averaging down in fixed size and in equal distances for example buy 1 lot every 100 pips , then it is impossible to always have the average entry price near the bottom , it will be exactly in the middle between the first entry and the last one , one would need 50% retracement just to get back to BE .

Ofcourse there could be another version of averaging down , for example first buy every 100 pips then buy every 50 and so on, while increasing size more aggressively all the way down just to try to make the average entry near the bottom , but that wont work every time , at some point you will run out of fuel before seeing the bottom , which will keep your average entry hanging up there way off the bottom . Not to mention the steep drawdowns you will suffer just to get back to BE .

Which brings me to the old saying : martingale works if you have unlimited money .

All of this is just to avoid taking a loss of few pips in the first place while being ok with taking the same amount as profits .

Fine, until you add in all the gains on the other side.

It's more a system of "booked profits" v "any on going drawdown"

 

[tar]

Fine, until you add in all the gains on the other side.

It's more a system of "booked profits" v "any on going drawdown"

You will have a perfect situation during ranging markets , but in a trending market you will get hammered on one side .

 

[counter_violent]

You will have a perfect situation during ranging markets , but in a trending market you will get hammered on one side .

No it's not true. The series of trades doesn't end until you have the overall desired outcome. Just have to stay disciplined.

Think of it this way. Altering the rules of trading whereby the method suits nobody but you. That's the edge.

 

[darktone]

The biggest problem youll have will likely be....

See what I mean :cheesy:
The wall is big, and invisible

 

[Oscar Reed]

Its not so much hedging as it is to seek value. Trading tops and bottoms is impossible except that its not. You can buy - manage - and end up with an averaged position near the bottom of the market. Not a huge leap from here to realise you can do the same to the short side as prices go up. Net result is you have an averaged long and short position at the top and bottom of the market, which providing you done a half sensible job at managing ya shiz will show a profit (sometimes better than final position). Of course it doesnt matter if ya nedged in the same instrument or hedged in a different whatever. You have two sets of comish to pay which seals its fate for most but you can trade out favourably of course. No need to have a view of direction as youre just fading the moves.
Just approach of many.

The biggest problem youll have will likely be....

Got to believe in yourself and not others.

Is the ASX going up or down today.

Who cares, orders placed somewhere on Sunday.

Will have a check at lunch time and adjust if needed.

Hopefully a few of these traders on top of the wall

 

[darktone]

If trader X is buying and averaging down in fixed size and in equal distances for example buy 1 lot every 100 pips , then it is impossible to always have the average entry price near the bottom , it will be exactly in the middle between the first entry and the last one , one would need 50% retracement just to get back to BE .

Ofcourse there could be another version of averaging down , for example first buy every 100 pips then buy every 50 and so on, while increasing size more aggressively all the way down just to try to make the average entry near the bottom , but that wont work every time , at some point you will run out of fuel before seeing the bottom , which will keep your average entry hanging up there way off the bottom . Not to mention the steep drawdowns you will suffer just to get back to BE .

Which brings me to the old saying : martingale works if you have unlimited money .

All of this is just to avoid taking a loss of few pips in the first place while being ok with taking the same amount as profits .

Thats a very limited view mate. Kinda surprised tbh

 

[Fugazsy]

As you mentioned the wider the stop the higher the win rate but the smaller the RR.
You have to find you own balance.
Many do not use SL's at all but have other ways to protect their back.
Personally I use SL's otherwise I cannot sleep well.
If you take a trade in the direction of the least resistance with a strong signal bar having a stop above/below that swing can be save at least 70% of the time.
If the signal bar is not that strong you can also place a SL above/below at the previous swing because there is a tendency the market will come and test the actual swing before continuing in your initial direction.

 

[Oscar Reed]

If trader X is buying and averaging down in fixed size and in equal distances for example buy 1 lot every 100 pips , then it is impossible to always have the average entry price near the bottom , it will be exactly in the middle between the first entry and the last one , one would need 50% retracement just to get back to BE .

Ofcourse there could be another version of averaging down , for example first buy every 100 pips then buy every 50 and so on, while increasing size more aggressively all the way down just to try to make the average entry near the bottom , but that wont work every time , at some point you will run out of fuel before seeing the bottom , which will keep your average entry hanging up there way off the bottom . Not to mention the steep drawdowns you will suffer just to get back to BE .

Which brings me to the old saying : martingale works if you have unlimited money .

All of this is just to avoid taking a loss of few pips in the first place while being ok with taking the same amount as profits .

Would you be willing to start a thread on stop losses?


And how to trade them?

 

[tar]

Would you be willing to start a thread on stop losses?


And how to trade them?

How to trade them ? = How long is a string .

You dont trade a stop loss its just another tool in your MM arsenal , most of the time i dont use them , but i take losses on nearly half of my trades .