Place your Stops first?

[new_trader]

We're going for a picnic. It's been sunny for days. It's the middle of Summer. The forecast is for good weather. It's never, ever rained on this day ever before. You fully intend to use your sunscreen, sunglasses and sun hat. It's warm. It's going to be a lovely day. There's not a cloud in the sky. Warm and dry.

But you take an umbrella.

Most of the time you're not going to need it. But it costs you nothing to take it. And you'll be one of the very few who look cool on the very odd occasion when you really do need it.

If it does start to rain you can decide whether to stay out without being exposed to this unexpected turn of events protected by your cover or you can decide to go back home - you're (sic) flat.

It's a lot easier to already have an umbrella when it starts to pour than it is to try and buy when when everyone else is.

Does this help?

To me the analogy would be more like this: It's been sunny for days. It's the middle of Summer. The forecast is for good weather. It's never, ever rained on this day ever before. It's warm. It's going to be a lovely day. There's not a cloud in the sky. Warm and dry.

You plan to have a picnic but don't have sunscreen, a sun hat or sunglasses. Someone insists that you should buy an Umbrella first because the weather may change just as you've bought the sunscreen. I'm saying that you should buy the sunscreen and the umbrella at the same shop at the same time.

 

[Crap Buddist]

Place your stops first? o.k first tell me where the start is

Well, I dont like it. This concern that your stop isnt going to be there. Im tempted to say that if this is a problem, then trade a market where the stop can go in at the same time..

But those trading E's is this stop ie your going long, is this concern of the sell stop order a real, real second task to do situation, cant you just assign it at the same time?

Now ok, Oscar may of omitted that his plan was to go short too, although he decided and planned to go long, crikey its the same record again, but if he is saying he dont care, then to me he's betting on price fluctuations, and not in the camp that forceasts direction> Yes, forecasts the weather, observing ,feeling air pressure changes, we can often smell the rain before it arrives?

here it is, learning to forecast that the rain is likely to fall, ditto prices? now we dont have to get wet to know that its raining do we? no, we wait can look from the inside and see the rain, ahh so it is raining ,how long is this gonna last? It might do us good to learn and observe these cycles.

Now then some traders who are expert weatherpeeps, they be standing in nature stark whatsit naked, all this exposure to the elements over time sensitises (?hmm ) them to detecting weather changes , to a point where they be forecasting and prepared for rain before people get p1ssed on.

They learn this because they want and know it makes sense to learn about weather cycles, detecting the changes . They can then spot, what part of the cycle the weather is at? A change is coming, heavy rain likely to persist i see, Is this heavy rain or an april fools shower? ahh its easing, ahh a change is coming, and every Englishmans favourate surely. "Turned out nice again" hoorraaah!

Question when looking or observing cycles, is this the beginning of the end, or the end of the beginning? Or everything in between ? If we ask these questions, will the answers come to us? Worth being open to learn about I would of thought?

Whats this got to do with learning about stops? well how do we know where to stop ,if we dont know where the start is? And I think thats where a lot of trading indecision, emotion comes in. When we start off, we are not aware of the start, this not knowing of the cycles maybe creates inner frustration , but also, do we know that cycles in the markets even exist?

Who thinks they exist ? And if you do, then isnt that your number one task, to be able to observe them?

CB,I feel you wind buddy! eeessh! sounds like hes a few sandwiches short in his picnic basket.

I'll repeat that question, Who thinks price cycles exist ?

 

[Splitlink]

Well, if I come back to short term trading, which is different to the way I go at present, I shall bear Oscar's advice well in mind because it seems to make sense. It has to be tried and is like paper trading--if you try it for real, it doesn't always work. I've done enough trading over the years to be able to afford to experiment a little, so I'll keep an open mind and make it up, myself, when the time comes. It's an idea and airing ideas is what this is all about. Some are good and some bad.

Split

 

[new_trader]

Lest We Forget

Well, if I come back to short term trading, which is different to the way I go at present, I shall bear Oscar's advice well in mind because it seems to make sense. It has to be tried and is like paper trading--if you try it for real, it doesn't always work. I've done enough trading over the years to be able to afford to experiment a little, so I'll keep an open mind and make it up, myself, when the time comes. It's an idea and airing ideas is what this is all about. Some are good and some bad.

Split

The objective of a trader is to make consistant profits by judging the market correctly. Stops get a trader out of the market when they have misjudged it. Stops are not so a trader can fluke a profit from disaster. I think for the benefit of newbies it should be stated that you should only place stops first if you intend to go Long. Not sure if I am stating the obvious, but there may be some who will always place stops first regardless of which side they are trading. You wouldn't want the market to spike up and trigger your protective buy stop just before disaster strikes..

 

[options]

From cmc handbook:

"3.3 Stop Orders
A Stop or Stop Loss Order is an order normally placed to limit the loss on an open position. It is
therefore good practice to place this type of Conditional order to control any potential losses of your
open position(s) should the market move against you (a CRB is a guaranteed Stop Order, see Section 1,
para. 3.5).
A Stop Order can also be used to enter the market at an inferior rate, allowing you to enter the market
on a breakout of the current trading range.
Example
You are long £20 per point XXX Rolling Cash® at 124.25. You believe XXX will strengthen,
however want to limit your losses and place a GTC Stop loss order to sell £20 per point XXX,
Rolling Cash® at 100, thus limiting your losses if XXX falls to 100 or below."


Or if you put in a sell stop first before you buy the market, which is what Oscar is saying you are covering your ar*e should market tank. You do not now have an open short position running.

If market doesn't touch or pass through your stop level, nothing happens. You are not in the market short. You still put in the long trade after the stop goes in. The short is in first to protect you should the market suddenly tank and it will put you the correct side of what would have turned out to be a very bad move. You want the market to carry on long, that is how you see the trade. This is a emergency stop SHOULD it all go ti*s up.

I have had this happen to me when scalping. I know it has happened to others. You put an order on then before you have a chance to put your stop in, the market moves against you and you are screwed, You can't get out for various reasons. Your order hangs, re-quote, screen freeze, dealer not answering phone. etc etc.

How hard is it to follow this!

 

[Crap Buddist]

well, yeah buy or sell stop orders are orders to buy or sell at a higher or lower price than the current market price.... now if ,as oscar did planned to go long but sends a sell stop order in 1st then he's net short, if it gets hit, against his intended long ? how crazy is that ? when he planned to go long?

Now i think to get this guy long according to his plan, that is if hes gonna actually trade his plan and not be subjected to the intra session decision making option based on his fear of weakening prices sub his 410 planned entry, well when its sub 410 , 408 for instance he should send a buy stop order , and maybe even a buy stop limit order, with a limit of 0.75 , so when the market traders 410 his orders sent to buy long subject to being within 410 - 410.75 (his limit) then and ok so hes buying into strength but at least his sell stop order should sweetly go through to rest ready for 405. That will then be his emergency stop , since he will now be open long, according to his plan.

now lets look at this..... below
********************************************************************************

A Stop or Stop Loss Order is an order normally placed to limit the loss on an open position. It is
therefore good practice to place this type of Conditional order to control any potential losses of your
open position(s) should the market move against you (a CRB is a guaranteed Stop Order, see Section 1,
para. 3.5).
A Stop Order can also be used to enter the market at an inferior rate, allowing you to enter the market
on a breakout of the current trading range.

***************************************************************************************************

Oscar hasn't got an open position yet though has he ?

which means. yep the second bold bit

"also be used to enter the market at an inferior rate, "

so the trader now not only is not going long according to his plan, but sending the sell stop order first, he's actually at risk entering the market at an inferior rate and in the totally wrong direction which he planned to enter !


question why put yourself in a position to accept an inferior rate entry for your trades ? ahh CB hang on mate weve heard entries dont matter mate, as long as the direction is sound?

Direction important then? hmm well look how it pans out beautifully, summed up as .

Trader A, not bothered to learn direction = likely to get inferior entries & rates of entry.

Trader B, very bothered to learn direction = likely to get superior entries & rates of entry.

What class we choose to attend, i guess its up to each of us. What we demand for ourselves. Yeah... like I heard on the telly, the 10 demandments of trading....

 

[new_trader]

From cmc handbook:

"3.3 Stop Orders
A Stop or Stop Loss Order is an order normally placed to limit the loss on an open position. It is
therefore good practice to place this type of Conditional order to control any potential losses of your
open position(s) should the market move against you (a CRB is a guaranteed Stop Order, see Section 1,
para. 3.5).
A Stop Order can also be used to enter the market at an inferior rate, allowing you to enter the market
on a breakout of the current trading range.
Example
You are long £20 per point XXX Rolling Cash® at 124.25. You believe XXX will strengthen,
however want to limit your losses and place a GTC Stop loss order to sell £20 per point XXX,
Rolling Cash® at 100, thus limiting your losses if XXX falls to 100 or below."


Or if you put in a sell stop first before you buy the market, which is what Oscar is saying you are covering your ar*e should market tank. You do not now have an open short position running.

If market doesn't touch or pass through your stop level, nothing happens. You are not in the market short. You still put in the long trade after the stop goes in. The short is in first to protect you should the market suddenly tank and it will put you the correct side of what would have turned out to be a very bad move. You want the market to carry on long, that is how you see the trade. This is a emergency stop SHOULD it all go ti*s up.

I have had this happen to me when scalping. I know it has happened to others. You put an order on then before you have a chance to put your stop in, the market moves against you and you are screwed, You can't get out for various reasons. Your order hangs, re-quote, screen freeze, dealer not answering phone. etc etc.

How hard is it to follow this!

Oscar was NOT talking about scalping.

I mentioned the very real likelyhood of losing the connection to your broker. My suggestion was putting your stop order in at the same time as your market order. That way you are protected if the market moves against you in EITHER direction.

If you want to fluke a profit by putting in your short stop entry first then by all means do it, but please don't try and convince anyone, at least no me, that this is what Oscar is advising. He was advising people to place Short stops first to protect against the UNLIKELY event that a disaster occurs between placing your LONG order and short stop. This is clearly for people who type 3 words per minute or haven't quite figured out how to use their mouse. Perhaps they are still sending orders to their brokers by morse code.

How hard is this to follow?

 

[tightstops]

Oscar was NOT talking about scalping.

I mentioned the very real likelyhood of losing the connection to your broker. My suggestion was putting your stop order in at the same time as your market order. That way you are protected if the market moves against you in EITHER direction.

If you want to fluke a profit by putting in your short stop entry first then by all means do it, but please don't try and convince anyone, at least no me, that this is what Oscar is advising. He was advising people to place Short stops first to protect against the UNLIKELY event that a disaster occurs between placing your LONG order and short stop. This is clearly for people who type 3 words per minute or haven't quite figured out how to use their mouse. Perhaps they are still sending orders to their brokers by morse code.

How hard is this to follow?

its amazing how long this threads lasted and by the way thanks fibonneli for the link. i liked connies analogy but to keep it really simple forget about long forget about short. what hes saying can be summed up as :-
by putting your stop loss in first if your analysis is wrong you stay out of trouble if theres a big and fast move in the opposite direction

 

[options]

new trader:

"Oscar was NOT talking about scalping."

Never said he was.

"I mentioned the very real likelyhood of losing the connection to your broker. My suggestion was putting your stop order in at the same time as your market order. That way you are protected if the market moves against you in EITHER direction."

Nearly what Oscar was saying. But he didn't.


"If you want to fluke a profit by putting in your short stop entry first then by all means do it, but please don't try and convince anyone, at least no me, that this is what Oscar is advising. He was advising people to place Short stops first to protect against the UNLIKELY event that a disaster occurs between placing your LONG order and short stop."

..."but please don't try and convince anyone, at least no me,..."

Why not, you special then?

Who said anything about 'fluking' a profit? Not me... Hold on, Oscar did!
I wouldn't try to convince anyone of anything. I really couldn't care less. You know nothing about the way I trade. Your last sentence there is what I have been saying all along. And isn't "putting in your short stop entry first." The same as, "...place Short stops first..." ?

 

[futuresanalysts]

Gentlemen,

There could be a move that happens tomorrow morning while your placing your order in a market.
Let's say the s&p.

Scenario.

Your trade plan for today is to buy s&p at 1405.00 and sell it at 1400.00 on a stop if your wrong.

So the market opens at 1407.00 and you begin to enter orders. You type B 1 ESM7 @ 1405.00, enter.
Just as your finger hits the enter button news hits that our president has been shot and the market is trading 1372.50 before you get a chance to look back up at your screen. If that finger came off the botton after just placing the stop order first, you would have short at 1400.00 and happy instead of long at 1405.00 and wishing you were out of the market.

If you do not think this happens during the course of a trades life...then get ready, You will be schooled at some point.

I hope this helps.

Good luck trading,

Oscar

 

[Crap Buddist]

Gentlemen,

There could be a move that happens tomorrow morning while your placing your order in a market.
Let's say the s&p.

Scenario.

Your trade plan for today is to buy s&p at 1405.00 and sell it at 1400.00 on a stop if your wrong.

So the market opens at 1407.00 and you begin to enter orders. You type B 1 ESM7 @ 1405.00, enter.
Just as your finger hits the enter button news hits that our president has been shot and the market is trading 1372.50 before you get a chance to look back up at your screen. If that finger came off the botton after just placing the stop order first, you would have short at 1400.00 and happy instead of long at 1405.00 and wishing you were out of the market.

If you do not think this happens during the course of a trades life...then get ready, You will be schooled at some point.

I hope this helps.

Good luck trading,

Oscar

hmm yes, see your point if you are planning short or long at two points and take the either or, whatever gets hit first is o.k.

but I would of thought it would gap on news like that ? so filling your short where ? would it not be better to use a sell stop limit order so your not filled on your short of 1400 at 1325 or something something if it gaps?

so sell stop 1400, limt (1403-1397) that way if it gaps 50 points + you be out and not

selling a low tic ?

ok so a gap of 50 + points is a tad Xtreme, but you know what i mean, when a sell stop order is sent as a market order and if the price does gap when a president is assasinated do we want to be filled short at any price to open ?

 

[futuresanalysts]

hmm yes, see your point if you are planning short or long at two points and take the either or, whatever gets hit first is o.k.

but I would of thought it would gap on news like that ? so filling your short where ? would it not be better to use a sell stop limit order so your not filled on your short of 1400 at 1325 or something something if it gaps?

so sell stop 1400, limt (1403-1397) that way if it gaps 50 points + you be out and not selling a low tic ?

This is not worth arguing about. There are markets open. I wish you well.

Oscar

 

[Crap Buddist]

This is not worth arguing about. There are markets open. I wish you well.

Oscar

Its not an argument, why not have a limit order on your sell stop order? makes sense to me ? you might then get filled at a better price or limited to a price that you dont want to go chasing beyond.

 

[Splitlink]

Its not an argument, why not have a limit order on your sell stop order? makes sense to me ? you might then get filled at a better price or limited to a price that you dont want to go chasing beyond.

He probably agrees with you but he's right, it's not worth arguing about. He was, originally, warning everyone to put stops on first. The fine tuning with limits is up to each trader.

Split

 

[Crap Buddist]

He probably agrees with you but he's right, it's not worth arguing about. He was, originally, warning everyone to put stops on first. The fine tuning with limits is up to each trader.

Split

Bahh humnbug, tell you what split I dont like the idea of paying premium for breakouts and yes ok we each do what we each do, I think we should test all theories to destruction to get the best out of all situations ,including Presidents brains seperating from their cranium and the sudden effect on price, some may challenge that this is the living case already with the president and price is relatively stable though if this is viewed as argument , then ,well it closes off further detailing .

Salutations.

 

[Splitlink]

Bahh humnbug, tell you what split I dont like the idea of paying premium for breakouts and yes ok we each do what we each do, I think we should test all theories to destruction to get the best out of all situations ,including Presidents brains seperating from their cranium and the sudden effect on price, some may challenge that this is the living case already with the president and price is relatively stable though if this is viewed as argument , then ,well it closes off further detailing .

Salutations.

Ah! Humbug! I see you read your Dickens

Split

 

[new_trader]

new trader:

Why not, you special then?

Yes.

 

[new_trader]

Gentlemen,

There could be a move that happens tomorrow morning while your placing your order in a market.
Let's say the s&p.

Scenario.

Your trade plan for today is to buy s&p at 1405.00 and sell it at 1400.00 on a stop if your wrong.

So the market opens at 1407.00 and you begin to enter orders. You type B 1 ESM7 @ 1405.00, enter.
Just as your finger hits the enter button news hits that our president has been shot and the market is trading 1372.50 before you get a chance to look back up at your screen. If that finger came off the botton after just placing the stop order first, you would have short at 1400.00 and happy instead of long at 1405.00 and wishing you were out of the market.

If you do not think this happens during the course of a trades life...then get ready, You will be schooled at some point.

I hope this helps.

Good luck trading,

Oscar

Good to see you here Oscar, I enjoy your video's and good call on the S&P yesterday.

Below (with a/c details removed) is the ASCII file I would send to Globex to place 2 orders in the market simultaneously. They are created quickly with a few quick and easy mouse clicks. You can even save the setup to reduce editing time for future trades.

--------------------------------------------------------
True;A/Cxxx;Buy;1;ESM7;Limit;None;1405;0;default;default
True;A/Cxxx;Sell;1;ESM7;Stop;None;1400;0;default;default
--------------------------------------------------------

It is less than 1 kB in size and travels at close to the speed of light. If the market is trading at 1407 when I press send I will emphatically state that if my limit gets filled because of a disaster my stop will already be in place to protect it. Sure, I won't profit from the disaster, but it has never been a part of my trading strategy and never will be.

 

[laptop1]

Lets say it again. Fundamentally, anything can happen in the markets, all Oscar is doing is, protecting his capital from bad news hitting the market...

Let’s say you placed a trade with no stop first. As soon as you hit the buy button you are filled, at the same time, bad news hits the market; the market without hesitation tanks!. You stop would have been about 2 S&P points, "but you did not place it," Within seconds the market is down 10 points on bad news, you look at the screen and freeze will you take the 10 point loss.

Ho sh1T it’s now down 15 s&p points. you freeze again and say something like, I wait for a pull back. while you are waitng for the pull back it s now down 20 s&p points and you are lossing your shirt. Remember, It can happen. if you placed a stop first, you would have made 18 s&p points. it can happen.

What he say makes sense. He is protecting his capital from bad news hitting the market thats all.

Or why not use ninja trading platform, you can place a buy order and stop simutanously

 

[new_trader]

Still placing stops first??

Good to see you here Oscar, I enjoy your video's and good call on the S&P yesterday.

Below (with a/c details removed) is the ASCII file I would send to Globex to place 2 orders in the market simultaneously. They are created quickly with a few quick and easy mouse clicks. You can even save the setup to reduce editing time for future trades.

--------------------------------------------------------
True;A/Cxxx;Buy;1;ESM7;Limit;None;1405;0;default;default
True;A/Cxxx;Sell;1;ESM7;Stop;None;1400;0;default;default
--------------------------------------------------------

It is less than 1 kB in size and travels at close to the speed of light. If the market is trading at 1407 when I press send I will emphatically state that if my limit gets filled because of a disaster my stop will already be in place to protect it. Sure, I won't profit from the disaster, but it has never been a part of my trading strategy and never will be.

Has anyone seen this Video clip?

4/9/07 S&P, EMINI AND FUTURES RECOMMENDATIONS

The chart he talks about at 2min 40sec.

Would you regret placing your stop first if you intended going long?