How do you guys decide your stops/limits?

[barjon]

........... you can't predict which way the market would go..........

No. you can't, but you can make an assumption (or educated guess if you will ). Your job then is to take adequate advantage when it goes right and limit the damage when it doesn't.

 

[mike.]

I NEVER leave my trades overnight and most of the time, I've found that there is almost a maximum no. of points the markets tend to rise/fall within one trading day

Ok, this can be easily found on your ig charts, called ATR, short for average true range, something that may be of use to you.

...even with good/bad news (Unless it's extremely bad, such as BREXIT/GREXIT or TERRORIST ATTACK.

You will most likely find that the market has reacted and made a significant drop long before you hear about any greek exit. This is where money management comes into place and guaranteed stops.

 

[sharesr4us]

Heres a little screenie of a friday campaign.
The orange tags mark the time and place of the scratched trades. (focus on their execution, all at limit.)
The red tags are the shorts held through the turn. (Ma cross)
The aqua tags are the profits on those shorts. (all taken at limit, at the best prices in that moment)

Looking at the screenie youl notice I could have taken an averaged -10 on those scratched trades. I took -3. Ask yourself where a 10 point stop would have got you out? Getting it yet?

If you closer youll notice the positive slippage on some exits, on the entries but not shown, just something else in my favour. Another glance shows the wall of stacked sell limits that I cancelled after the show.

The main point im trying to convey is that I was seeking value in every execution. Going in, scratching, coming out. A stop player does the exact opposite.

Thanks very much for the information and screenshot. Couple of questions:-

1. What software and broker do you use? Also what chart tools do you use?
2. Would you not say that the only difference between how I trade and how you trade is the length of time? You seem to trade very short trades that last no longer than 5-10 mins, whereas I may stay in a trade from 30 mins to hours.

I just mean dont bother.
with the news
with resistance or any of that other bs
with how you feel.

I got your pm

So do you jump in whenever you feel like?

No. you can't, but you can make an assumption (or educated guess if you will ). Your job then is to take adequate advantage when it goes right and limit the damage when it doesn't.

Would you not say that my strategy is kind of an educated guess?

Ok, this can be easily found on your ig charts, called ATR, short for average true range, something that may be of use to you.



You will most likely find that the market has reacted and made a significant drop long before you hear about any greek exit. This is where money management comes into place and guaranteed stops.

Thank you mike. I have enabled ATR on ig index, but don't know what period to set it to (currently on 14) or how to use it...

Regarding market reaction...this is exactly why I always enable my guaranteed stops. They might cost a bit more, but I think they are worth the peace of mind, especially with constant financial turmoil in europe and the fact that I'm not always watching my computer screen all day.

 

[darktone]

Thanks very much for the information and screenshot. Couple of questions:-

1. What software and broker do you use? Also what chart tools do you use?
GKFX sb for practise/ platform is mt4. Tools? MAs are fine
2. Would you not say that the only difference between how I trade and how you trade is the length of time?
No, you use stops to try and manage risk. I dont know how you enter either.
You seem to trade very short trades that last no longer than 5-10 mins, whereas I may stay in a trade from 30 mins to hours.
I like to trade longer periods. I like to practice / explore new ideas in the short term with small size. The example I posted took 27mins from first entry to final exit. You can cover a lot of road quickly in the short term which is why im suggesting you do it.

So do you jump in whenever you feel like?
I jump in when I see an opportunity. If say im following trend (definable up or down) in 4hr and I see a counter trend move in 1min. ill play.

Theres a video on here about stops.
F****d on the way in and F*****d on the way out

 

[sharesr4us]

Thank you darktone.

I want to learn short-term trading but i'm having some difficulty in understanding, hence my request for help on here.

regarding that video you posted....it shows what happens by not having a guaranteed stop loss...something which i always have enabled.

 

[counter_violent]

Thank you darktone.

I want to learn short-term trading but i'm having some difficulty in understanding, hence my request for help on here.

regarding that video you posted....it shows what happens by not having a guaranteed stop loss...something which i always have enabled.

Depends which firm you trade with....in DMA there is no such thing as a guaranteed stop. With some SB co's, should they decide to honour them, there may be a guaranteed stop, but if honoured, this will be a goodwill gesture by the company. The company may well take a hit in the short term as an expense in order to keep the client happy.

 

[sharesr4us]

According to IG Index:-

Guaranteed stops

Attaching a guaranteed stop puts an absolute limit on your potential loss. Even if the market gaps suddenly, your position will be closed out at exactly the price you specified, with no risk of slippage.

You can only add a guaranteed stop when you place a new trade and cannot attach one to an existing position. This is also subject to an additional charge.

 

[alexaherself]

no matter what support/resistance method you use, you can't predict which way the market would go. It might give you a better idea, but not guaranteed knowledge of market direction.

Not guaranteed knowledge, no. Not in an individual, specific instance. Nobody can have that.

Luckily, though, we don't need that, either, to make a living from the markets: we need only knowledge of observable, provable, relatively reliable overall/collective market tendencies, as I explained in post #50, above.

But if you believe (as you've now stated a couple of times and implied a couple of times more) that it's always purely random, then in my opinion you'll need significantly to reappraise that belief before starting your trading education in any meaningful sense.

 

[darktone]

Thank you darktone.

I want to learn short-term trading but i'm having some difficulty in understanding, hence my request for help on here.

regarding that video you posted....it shows what happens by not having a guaranteed stop loss...something which i always have enabled.

Short term long term, same deal. Just the psych is a bit different.

The video shows that risk is not your size x distance to your stop. As some folk on here like to believe

Guaranteed stop loss:- Thats a standard stop 'get me out at worst price of the moment please' + premium for the privilege of a G stop and hopefully no small print that you missed that reads something like 'All G stops will be honoured' except when shít really does hit fan an we have to ᵳuck customers over going bust!

 

[sharesr4us]

Not guaranteed knowledge, no. Not in an individual, specific instance. Nobody can have that.

Luckily, though, we don't need that, either, to make a living from the markets: we need only knowledge of observable, provable, relatively reliable overall/collective market tendencies, as I explained in post #50, above.

But if you believe (as you've now stated a couple of times and implied a couple of times more) that it's always purely random, then in my opinion you'll need significantly to reappraise that belief before starting your trading education in any meaningful sense.

I do apologise if I haven't been clear, but maybe I haven't worded my posts properly. I don't mean that markets are totally random as I do believe there is a pattern definitely in the way trades placed. But what I also believe is that these patterns of trading are not 100% the same and on many occasions they can be out of sync or not as expected, making it difficult for novice traders like myself and causing us beginners to lose.

Short term long term, same deal. Just the psych is a bit different.

The video shows that risk is not your size x distance to your stop. As some folk on here like to believe

Guaranteed stop loss:- Thats a standard stop 'get me out at worst price of the moment please' + premium for the privilege of a G stop and hopefully no small print that you missed that reads something like 'All G stops will be honoured' except when shít really does hit fan an we have to ᵳuck customers over going bust!

I believe if you use a normal stop-loss then IG won't honour the trade. However, they have re-iterated that any trade that has a guaranteed stop-loss will be honoured no matter what market condition it is:-

http://www.financial-spread-betting.com/Guaranteed-stops.html

IG Index: 'I can completely understand your concerns and why you have them, however please be assured that at IG a Guaranteed Stop means exactly that. When you open up a position with a Guaranteed Stop, you do pay an extra premium for this facility. But we will always honour this type of stop and close a Guaranteed Stop position at the specified Guaranteed Stop level.'

Cantor Index: 'Force Majeure' we do not rule out as it is part of our terms and conditions. It has very rarely been used by Cantor's even in the current volatile climate with shares. 100% movement in a stock may well make us use 'force majeure'.

City Index: At City Index, our Stop Loss Orders, once triggered, are executed at the first price reasonably available, which is normally the order level. However, our Guaranteed Stop Loss Orders, once triggered, will be executed at the proposed execution price regardless of any gapping. City Index Terms (in particular clause 17.4 of our General Terms) describe orders in details and make clear that Guaranteed Stop Loss Orders will be executed once triggered at the order level regardless of underlying market gapping, hence the small charge levied for this guarantee.

 

[alexaherself]

I believe if you use a normal stop-loss then IG won't honour the trade. However, they have re-iterated that any trade that has a guaranteed stop-loss will be honoured no matter what market condition it is

This is clearly correct: if you pay IG the extra for a guaranteed stop-loss on your spreadbetting trades, then they won't end up - under any conditions - costing you more than the stop-loss level specified. You've effectively insured against that by paying a "premium".

 

[sharesr4us]

Thanks for clarifying that alexa.

 

[arigoldman]

Thanks for clarifying that alexa.

+1