Suggestions for mastering speculation

This is a discussion on Suggestions for mastering speculation within the General Trading Chat forums, part of the Reception category; Originally Posted by new_trader I honestly do not understand what you mean by the pain of volatility. I look at ...

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Old Oct 8, 2008, 6:25pm   #17
 
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Originally Posted by new_trader View Post
I honestly do not understand what you mean by the pain of volatility. I look at my screen and wait to see a positive indication to trade or I do nothing, and thatís it.
All I mean is how do you define how large your stop level should be and how would you define the size of your stop level if you were a longer term trader?
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Old Oct 8, 2008, 6:44pm   #18
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Originally Posted by ahardy66 View Post
What do you mean by that? Surely that's a recipe to let your emotions take control?
If your emotions are in control of you they are not cultivated.
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Old Oct 8, 2008, 6:55pm   #19
 
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Originally Posted by Jaydee View Post
All I mean is how do you define how large your stop level should be and how would you define the size of your stop level if you were a longer term trader?
Let me explain it like this:

A sniper tells you that they only pull the trigger if they are certain that the bullet they are firing is going to kill their target.

Do you need to ask, what about if you are firing from a different distance?

Do you need to ask, what about in different weather conditions?

Do you need to ask, what if the target is moving?

The sniper repeats, they only pull the trigger if they are certain the bullet they are firing is going to kill their target.

In the same way, I am saying that stops are a function of proficiency.
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Old Oct 8, 2008, 7:00pm   #20
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No, stops are a function of time.
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Old Oct 8, 2008, 7:01pm   #21
 
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Originally Posted by new_trader View Post
Let me explain it like this:

A sniper tells you that they only pull the trigger if they are certain that the bullet they are firing is going to kill their target.

Do you need to ask, what about if you are firing from a different distance?

Do you need to ask, what about in different weather conditions?

Do you need to ask, what if the target is moving?

The sniper repeats, they only pull the trigger if they are certain the bullet they are firing is going to kill their target.

In the same way, I am saying that stops are a function of proficiency.
Only proficiency?

So you are telling me that you would have a 5 tick stop on an ES trade that you planned on running over a period of days rather than intraday?
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Old Oct 8, 2008, 7:23pm   #22
 
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Originally Posted by Jaydee View Post
Only proficiency?

So you are telling me that you would have a 5 tick stop on an ES trade that you planned on running over a period of days rather than intraday?
Get the 5 tick stop out of your head and you might start to think a little clearer. I am saying that proficiency is the result of study and practice. What is so confusing? What can't you grasp?

Are you suggesting that the amount of guessing you do is proportional to the term of the trade? Are you suggesting skill is only relevnt on short term trades and luck should be relied upon for longer term trades?

I don't know how to make my point any clearer.
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Old Oct 8, 2008, 7:27pm   #23
 
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Originally Posted by new_trader View Post
Get the 5 tick stop out of your head and you might start to think a little clearer. I am saying that proficiency is the result of study and practice. What is so confusing? What can't you grasp?

Are you suggesting that the amount of guessing you do is proportional to the term of the trade? Are you suggesting skill is only relevnt on short term trades and luck should be relied upon for longer term trades?

I don't know how to make my point any clearer.
Are you ever going to post an answer to a question I post?
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Old Oct 8, 2008, 7:51pm   #24
Joined Mar 2005
Trading Vol

Here's a trade I've just done which illustrates that you can have wide stops based on volatility, and provided you use the vol to your advantage in the exits, you'll do far better than being ultra-precise and scalping for a few ticks.

The trade was a pivot point fade, the pivot point being more fadeable the more time has passed throught the day.

The stop is based on resistance, but should come in similar to 15-min ATR

Sell 3 at 1027.00
Stops at 1033.25
Exit at 1018.25

Profit = 3 x 8.75 = +26.25 points

Even though the stop was 6.25 away from the entry point, the move only got as high as 1027.25. What I'm saying is that the price should reverse somewhere between 1027.00 and 1033.25 - where exactly I don't care.

The point is the position of the stop is not the same as the risk of the trade

Then throughout the life of the trade the P/L deteriorated at times by 4pts, and the end result was inefficient in that it got as low as 1014.00. But who cares when the end result is + 9 handles?

Joey
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Last edited by Joey25; Oct 8, 2008 at 7:54pm. Reason: Thanks for BSD for pointing me in this direction!!!
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