Is the probability of my losing money 60%

[new_trader]

What is your view on QE's ? I am genuinely interested, We will see one way or another after this month. The noises from china now indicates that they see a default, presumably from lack of QE.

 

[BeginnerJoe]

Don't just laugh. I am a beginner you know ? So explain it in a single quick sentence, if you are too busy trading. At least if you put your punt down in pixels, people will see you are right and increase their respect for you.

 

[Shanghai]

I am not saying the price move would be artificial. I noticed the frequency of actual price moves that hit stops and immediately reverse in direction is so high as to be a dead cert. I am sure other SB players would have made similar observations. Someone is out there taking out stops. We can infer the the source of that being, at least in part, the beneficiary. If I have no stops, there's nothing for them to play with.

You should change your reference to "SB companies" to say that the "market" deliberately takes out stops. That's what the market is designed to do. And where your stops are then likely 100's of other market participants all have their stops. Its not the SB companies fault.

My entire strategy is based on prices moving one way, taking out a whole bunch of stops and then moving in the opposite direction. I've been trading it for years and it brings in a lot of money from people who are frustrated that their stops have just been hit and swear they will never use them again.

 

[BeginnerJoe]

You should change your reference to "SB companies" to say that the "market" deliberately takes out stops. That's what the market is designed to do. And where your stops are then likely 100's of other market participants all have their stops. Its not the SB companies fault.

My entire strategy is based on prices moving one way, taking out a whole bunch of stops and then moving in the opposite direction. I've been trading it for years and it brings in a lot of money from people who are frustrated that their stops have just been hit and swear they will never use them again.

So you are behind it all, huh ? I don't swear, I just don't use stops. If the price moves out of my range, I have no trouble stopping my positions manually. My current strategy is to profit from the stop busting moves, consequently the averaging down for long positions. It seems to work, not withstanding the market-environmental factors. I still need cooking time in differentiating the distinct move types.

I am also thinking of building a more active strategy that induces a stop busting move. I noticed the market sometimes was willing make big moves for tiny profits. This seemed like an opportunity to me.

 

[TheBramble]

I just don't use stops. If the price moves out of my range, I have no trouble stopping my positions manually.

Based on your OP your problem seems to be deciding what your range is, or perhpas sticking to it.

Don't worry, the good old boys at the SB will take that decision out of your hands eventually.

 

[Shanghai]

So you are behind it all, huh ? I don't swear, I just don't use stops. If the price moves out of my range, I have no trouble stopping my positions manually. My current strategy is to profit from the stop busting moves, consequently the averaging down for long positions. It seems to work, not withstanding the market-environmental factors. I still need cooking time in differentiating the distinct move types.

Yep its all my fault I admit it! Some people don't like using stops but before you enter every trade you need to know what you expect to see from the trade and if it doesn't materialise then you need to know when you will get out and at what level. If you always know this you will be ahead of a lot of other traders. Averaging down may often work but does leave you open to catastrophic losses on occasion.

 

[Hoggums]

Joe, you are making the classic beginner mistakes, no stops and averaging down.

We've seen it all before on this forum many times and everyone of those went quiet after a few weeks when they ran out of margin and suffered huge losses.

The same will happen to you. They way you trade it only has to happen once and you are bust. That's hardly a sustainable trading strategy is it?

You can't win every single position, and there will always be a trade where it doesn't rebound.

Don't be another statistic. Once you've averaged in a few times your loss will be so big that you won't want to take it - and you'll end up holding on in hope as it gets worse and worse.

 

[leonarda]

I am not saying the price move would be artificial. I noticed the frequency of actual price moves that hit stops and immediately reverse in direction is so high as to be a dead cert. I am sure other SB players would have made similar observations. Someone is out there taking out stops. We can infer the the source of that being, at least in part, the beneficiary. If I have no stops, there's nothing for them to play with.

my recommendation, don't bottom fish, don't average down, instead buy strong stocks in uptrends in an overall uptrending market, or something like that.... So I would not buy financials while that sector is in a downtrend. Also, I agree with you somewhat on stops, don't have them in any way close, as they will get taken out as that's what the "market" does, eg.tree shakes, it's not the SB companies. I use really wide automated "disaster" stops as I call them, but have a closer "mental" stop I use with discipline. I'm still relatively new at this game (2 years) and you can follow my journal here if you're interested (http://www.trade2win.com/boards/tra...medium-term-stock-spread-betting-journal.html).

 

[BeginnerJoe]

my recommendation, don't bottom fish, don't average down, instead buy strong stocks in uptrends in an overall uptrending market, or something like that.... So I would not buy financials while that sector is in a downtrend. Also, I agree with you somewhat on stops, don't have them in any way close, as they will get taken out as that's what the "market" does, eg.tree shakes, it's not the SB companies. I use really wide automated "disaster" stops as I call them, but have a closer "mental" stop I use with discipline. I'm still relatively new at this game (2 years) and you can follow my journal here if you're interested (http://www.trade2win.com/boards/tra...medium-term-stock-spread-betting-journal.html).

Thanks, the catastrophic disaster stop does make sense.

 

[BeginnerJoe]

Based on your OP your problem seems to be deciding what your range is, or perhpas sticking to it.

Don't worry, the good old boys at the SB will take that decision out of your hands eventually.

I knew my range. Unfortunately the jittery market can bend that range. Hence my continued concern with environmental factors.

Well, the SB boys can try take me out. They haven't succeeded yet and lost some ground to me still.

 

[TheBramble]

I knew my range. Unfortunately the jittery market can bend that range. Hence my continued concern with environmental factors.

Where have I heard this before...LOL

The market will often try and 'bend your range' (get you to move your stops, take your stops out altogether, move your limit closer and more). Of course, it's not ‘the market’ at all but the trader that does these things. The whole point of a robust stop placement strategy (or range setting strategy if you prefer) is NOT to move the beggars. This really is the hallmark of tyro.

Not having stops is one thing. But having stops and then moving them or removing them is quite another. Don’t kid yourself.

Well, the SB boys can try take me out. They haven't succeeded yet and lost some ground to me still.

I wasn’t talking about them trying to take you out, why would they bother. I was talking about them closing your positions when you max out.

 

[BeginnerJoe]

Ok, well I don't have stops. After a little thinking, I won't even bother with catastrophic stops because that still gives away my intentions.

I keep a very fat margin above the dealer margin. Knocking me out is not possible, unless a ftse100 company is capable of going to a 0p price in less than 5 seconds. I believe cash that the SB can see is a good deterrence against any funny moves they might contemplate.

 

[TheBramble]

Absolutely fuggin unbelievable.

 

[Shanghai]

Joe, people on here are being quite helpful but you really don't seem to get it. The SB companie are not focussed on your stops. In fact I wish they would manipulate prices away from the market prices as that would give great opportunities for arbitrage. Many people come on this forum and say the same things as you and none of them last. There is a reason why pretty much all the longer term successful traders use stops and don't average down.

 

[Mr. Charts]

Ok, well I don't have stops. After a little thinking, I won't even bother with catastrophic stops because that still gives away my intentions.

I keep a very fat margin above the dealer margin. Knocking me out is not possible, unless a ftse100 company is capable of going to a 0p price in less than 5 seconds. I believe cash that the SB can see is a good deterrence against any funny moves they might contemplate.

Are you for real, or just a returning multi-nick trying to wind people up?

 

[anley]

Joe

Very very few fortunes have been made (or even good profits over a period of time) by 1 trade, or even a few. But many many fortunes (or good profits over a period of time) have been made by adding up many profitable trades.

What this means is simple - NO TRADE (win or loss) should make a difference re longer term performance.

So why not use a stop to limit your risk on any and all given trades?

The way you're trading means you're thinking that the current trade you're in means something. Well, it might mean something today, but it's totally irrelevant over the year which means it means nothing today.

Something to think about.......

 

[TheBramble]

Are you for real, or just a returning multi-nick trying to wind people up?

Do you know what Richard, it occurred to me this morning that anybody registering with a nick of Beginner Joe, probably isn’t. Unless they fully intended to remain a beginner. And they’d have to be stupid to think like that….

And then I thought, if it were a wind-up merchant, he wouldn’t be so stupid as to be so obvious with choice of nick. Unless they were stupid….

Either way, it’s not looking good for BJ. (Echoes of last night….)

 

[scose-no-doubt]

Reading this thread is like looking at a previous version of myself. Actually quite embarrassing.

 

[BeginnerJoe]

Joe, people on here are being quite helpful but you really don't seem to get it. The SB companie are not focussed on your stops. In fact I wish they would manipulate prices away from the market prices as that would give great opportunities for arbitrage. Many people come on this forum and say the same things as you and none of them last. There is a reason why pretty much all the longer term successful traders use stops and don't average down.

I do get it. I know what the conventional wisdom says, hence I stated my position in the first post that I am going against it. Anyway I created the post for a laugh rather than a cry for help. Nevertheless I appreciate people trying to help.

As for success or failure, only time will tell. I certainly have no trouble telling people when I am losing as I see it as a milestone to success. So if I blowout, I will gladly tell you about it. Although I have to warn people I am the nasty permeating type that never disappear quickly until I mastered whatever I find interesting and get bored with it.

 

[Mr. Charts]

Tony, I'm sure the memories of some BJs are much more enjoyable....
The nick is probably an attempt at disinformation, being the other side of the weighted coin to the wind-up.
Richard