The hard learned Stop Loss lesson

ryan1978

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Today I have to say Ive learned my lesson on stop loss.They warned me on here
to use them ,everyone uses them.I have been trading for 6 months now and never
used them .Didnt know about stop loss until a few days ago when i joined here.
I thought i would have the discipline to get out when i needed to.

But emotions got the best of me.I had to get back to even no matter what as i watched my money drain more and more .

Wouldn't accept a 600 loss no way,then it was 1500 nope gotta hold it will drop just watch any minute now -itl come back,ul see.By close yesterday i was under 2,500.So I thought ok hold and itl drop in morning.Stock opened 2.00 up higher,I still held it!
Stubborn stubborn stubborn!!!!
I said it will drop by 10:15 when market reverses.It went up another 1.00 finally I got out.Couldn't take the pain anymore.In one day from yesterday til today lost near $8,000.That's alot considering I had only 10k profit from trading at this point.
Guess ill start over this time I will use a stoploss and let the broker get me out
automaticly so there's no emotion.Guess i didnt have the discipline I thought I had.
They told me on here ur gunna blow ur account stop now.When they told me that I planned on a stoploss of .50 that i would do myself I never did hit that BUY TO COVER button.
Don't know If You guys post ur bad trades or major losses buy anyway
Learned my lesson hopefully.Maybe its not too late.Still have 2,000 left for now.
Tradings my only hope of quiting my job and having freedom.Now I feel so desperate.
 
Unlucky mate, just try to think of it as the cost of learning.
Also maybe while your learning you should trade minimum stakes. At least that way your education wont be so expensive.
 
whatever you do don't quit your job until you have nailed the trading.
Don't feel desperate as you will chase it and are likely to make stupid trades.
Learn your lesson, reduce stake, use stops and try and build the account up slowly and consistenly
Trading isn't for everyone, no matter how good you think you could be at it
 
Trading is like being married, always be quick to admit when you're wrong.....

All kidding aside, use stops, always use stops. It's very hard to admit when you've got it wrong, but you have to, or you WILL be wiped out, period. The whole key is not to make money on every trade, but to make much, much bigger money when you do have it right, then you lost when you had it wrong.
 
Stops are essential but there's more than one sort, and as long as you have a system to get you out of a crashing position you could pick one that suits your temperament and style.

Money stop - gets you out when you are down so many $ or a percentage of your total capital, e.g. 2%
% stop - gets you out when you are x% down from a long entry (or x% up from a short)
Trailing stop - once in profit you move this one along behind your position, so that if it falls back x% or y points it will take you out.
TA stop - level determined by TA, e.g. breach of support/resistance, failure to confirm chart pattern etc.
TA momentum stop - point at which TA would stop telling you to enter (so why would anyone else)

Some work better for most people, some are pretty poor technique, but as long as you find a method and stick with it. It doesn't matter what colour your parachute is, as long as you have one. Don't enter until you have worked out where you will exit if it all goes wrong.
 
Pity you had to learn this way instead of on demo but at least you know now before you leave a trade on overnight and wipe yourself stright into razor-wrist territory.
Personally I wouldnt quit my job unless I'd been profitable for two-three years part time bringng in at least my salary but then you have a riskier attitute lol
 
There are so many ways that a site can crash, especially with spreadbetting companies, or the provider/computer can start to play up at your end.

That, apart from the unexpected price action, is a damned good reason to have a stop in place, right at the beginning of the trade.

This chart is Euro/GBP 5 min bars, 4th June. The wick on the 1230 bar measures over 70 points and the move was not over, it lasted for the afternoon.

Don't rely on telephone trading. If you don't see it happening you are not likely to phone. You are, probably, wondering what is the matter with the computer! Besides, I bet the switchboards were crowded.
 

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Today I have to say Ive learned my lesson on stop loss.They warned me on here
to use them ,everyone uses them.I have been trading for 6 months now and never
used them .Didnt know about stop loss until a few days ago when i joined here.
I thought i would have the discipline to get out when i needed to.

But emotions got the best of me.I had to get back to even no matter what as i watched my money drain more and more .

Wouldn't accept a 600 loss no way,then it was 1500 nope gotta hold it will drop just watch any minute now -itl come back,ul see.By close yesterday i was under 2,500.So I thought ok hold and itl drop in morning.Stock opened 2.00 up higher,I still held it!
Stubborn stubborn stubborn!!!!
I said it will drop by 10:15 when market reverses.It went up another 1.00 finally I got out.Couldn't take the pain anymore.In one day from yesterday til today lost near $8,000.That's alot considering I had only 10k profit from trading at this point.
Guess ill start over this time I will use a stoploss and let the broker get me out
automaticly so there's no emotion.Guess i didnt have the discipline I thought I had.
They told me on here ur gunna blow ur account stop now.When they told me that I planned on a stoploss of .50 that i would do myself I never did hit that BUY TO COVER button.
Don't know If You guys post ur bad trades or major losses buy anyway
Learned my lesson hopefully.Maybe its not too late.Still have 2,000 left for now.
Tradings my only hope of quiting my job and having freedom.Now I feel so desperate.

I know how it feels... but its OK... as long as you have learned your lesson... i lost 5K one day - first day - so i have been stung.. I had other issues... but whateve..
use stops... understand that you are playing with probability and risk and reward ratios.

your set-ups/ signals whata ever you use are your "suppose to be high probability trade" moving your way >50% times you put on the trade.

your risk and reward is your mix of stop loss and profit target.
manage your stop actively - specially in this volatile market. managing target on your winners is always the key to MAKE money in trading.

I know you know all this by now...and its the basics that is all you need.. one piece of advice .... keep reminding yourself about your weaknesses, until you dont have to.

"Trend is your ....."
cheers..

Guru
 
Today I have to say Ive learned my lesson on stop loss.They warned me on here
to use them ,everyone uses them.I have been trading for 6 months now and never
used them .Didnt know about stop loss until a few days ago when i joined here.
I thought i would have the discipline to get out when i needed to.


Tradings my only hope of quiting my job and having freedom.Now I feel so desperate.

Oh by the way dont quit ur job before have much saved for... only will make you more desperate...
BUT and the big BUTT....its ok if you r a swing or position trader...if you r a day trader/ scalper kinds... part time is part time. full time is no joke..very different...get a long leave and try trading fulltime and see if it works... and then make your move.
 
Today I have to say Ive learned my lesson on stop loss.They warned me on here
to use them ,everyone uses them.I have been trading for 6 months now and never
used them .Didnt know about stop loss until a few days ago when i joined here.
I thought i would have the discipline to get out when i needed to.

But emotions got the best of me.I had to get back to even no matter what as i watched my money drain more and more .

Wouldn't accept a 600 loss no way,then it was 1500 nope gotta hold it will drop just watch any minute now -itl come back,ul see.By close yesterday i was under 2,500.So I thought ok hold and itl drop in morning.Stock opened 2.00 up higher,I still held it!
Stubborn stubborn stubborn!!!!
I said it will drop by 10:15 when market reverses.It went up another 1.00 finally I got out.Couldn't take the pain anymore.In one day from yesterday til today lost near $8,000.That's alot considering I had only 10k profit from trading at this point.
Guess ill start over this time I will use a stoploss and let the broker get me out
automaticly so there's no emotion.Guess i didnt have the discipline I thought I had.
They told me on here ur gunna blow ur account stop now.When they told me that I planned on a stoploss of .50 that i would do myself I never did hit that BUY TO COVER button.
Don't know If You guys post ur bad trades or major losses buy anyway
Learned my lesson hopefully.Maybe its not too late.Still have 2,000 left for now.
Tradings my only hope of quiting my job and having freedom.Now I feel so desperate.


Not knowing anything about how you trade, nevertheless, I am certain 99% positive, that using stops NOW, you will now find your success/hit rate will be much poorer. This unfortunately is part of the learning cycle.....:confused:
 
Stops are essential but there's more than one sort, and as long as you have a system to get you out of a crashing position you could pick one that suits your temperament and style.

Money stop - gets you out when you are down so many $ or a percentage of your total capital, e.g. 2%
% stop - gets you out when you are x% down from a long entry (or x% up from a short)
Trailing stop - once in profit you move this one along behind your position, so that if it falls back x% or y points it will take you out.
TA stop - level determined by TA, e.g. breach of support/resistance, failure to confirm chart pattern etc.
TA momentum stop - point at which TA would stop telling you to enter (so why would anyone else)

Some work better for most people, some are pretty poor technique, but as long as you find a method and stick with it. It doesn't matter what colour your parachute is, as long as you have one. Don't enter until you have worked out where you will exit if it all goes wrong.

A time based stop would also be appropriate.
 
A time based stop would also be appropriate.

I would be very interested what you mean by this.....perhaps others would to? I follow the logic, that if nothing is happening you might as well get out and look for some volatility elswhere. Is this what you're alluding to?
 
I would be very interested what you mean by this.....perhaps others would to? I follow the logic, that if nothing is happening you might as well get out and look for some volatility elswhere. Is this what you're alluding to?

There are different time based stops. For example, after the entry you expect the price starts to move in one direction within 1/2 hours, so if you see the price doesn't do that then stop out after 1/2 hours. In forex you may want to use end of week stop, or in equities it maybe EOD stop. Or you could use Fib time stop. etc.
 
There are different time based stops. For example, after the entry you expect the price starts to move in one direction within 1/2 hours, so if you see the price doesn't do that then stop out after 1/2 hours. In forex you may want to use end of week stop, or in equities it maybe EOD stop. Or you could use Fib time stop. etc.

You would enter a trade even though you expect nothing to happen for 30 minutes??? What an odd strategy. So much for patience and discipline...take a guess, enter your trade then cross your fingers and wait.:LOL:
 
You would enter a trade even though you expect nothing to happen for 30 minutes??? What an odd strategy. So much for patience and discipline...take a guess, enter your trade then cross your fingers and wait.:LOL:

Mate. By looking at past trades and the length of time it took for them to be sucessful or not, one can easily determine when (if nothing has happened) the odds of a win are getting smaller. Eventually the odds will be so small its not worth staying in the position.
 
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Mate you are an idiot. By looking at past trades and the length of time it took for them to be sucessful or not, one can easily determine when (if nothing has happened) the odds of a win are getting smaller. Eventually the odds will be so small its not worth staying in the position.

I call that "getting fed up" :)
 
Mate. By looking at past trades and the length of time it took for them to be sucessful or not, one can easily determine when (if nothing has happened) the odds of a win are getting smaller. Eventually the odds will be so small its not worth staying in the position.

Yes, so why would you continue entering trades with such a wide stop that it can swing around for that length of time before you are convinced you are wrong? Do you actually think you are being logical?
 
Yeah thanks again guys for the great advice.I am trading with very little reading.I read the
"ELECTRONIC DAY TRADERS SECRETS" FROM MARC FREIDEFERTIG/GEORGE WEST a little.(by the way what do u guys think of this book,is it outdated from like 1990's i think; is it well read by most day traders?)

Ive been trading only WMT, book said stick with one stock better chance of survival.
And ive been getting in and out at .20 profit or less and no stops,hold till it comes back.

I work midnights at a Coke plant trade all day and sleep after then go back to work again;
lol dont even have time to take a ****, this is all have been doing,never miss a day of trading and managed to survive till now.Looking back dont know how i made it for 6 months.I think it was because i stuck with Walmart stock the whole time; it doesnt act crazy for the most part and trend without returning.But as soon as
i started experimenting with other stocks and 5 stocks at once instead of just WMT thats
when they got me.Holding on no matter what and no stops doesnt work for these other stocks i suppose.

Windowsill that is exactly what i was figuring out last night at work i was thinking if u take away
more risk then u make less profit.By adding risk management like stops you wont make as much or u
break even.I thought maybe the trick to trading is to learn how to still make money with the less risk in place.These ideas are probably so obvious to most of you but my knowledge of trading has a long way to go.Still figuring out the basics.Ill be at work all night just thinking about trading.

When im doing ok like making 300 a day for a couple wks i wanta quit so bad.I hate even walking into the factory.And alot of people in my small town would love to have my job.I only make $18 an hr figure thats 150 a day and I can double that on alot of days with trading.Its just the days i lose like 1500 (cus of no stops) that puts me back.And now with stops ill probably break even.

The thing that confuses me,ive read on here that they call traders"darksiders"- who only use level 1
trading (a chart) and thats all for indicators.I did read in book that Level 2 is not necessary for newbies.
And is actually worse for them.This is all i use just a chart.I was gunna start a thread and ask this and when you all started using level 2.Or maybe that i should use time and sales.Is there anything else i should use
for indicators.I still gotta check out time and sales and how u use it.

Anyway thanks again i know taking time to give out free advice to help others who are starting out doesnt benefit the giver much so i appreciate.Even one sentence of information can mean a big differance.i have to go back and read more closely all the replies so i dont miss any advice.
 
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