Let your profits run?

[15 min tlb]

100 pips stop is being static in "high volatility trending markets"

100 pip plus trail by 100 , if trend is choppy or highly volatile with 50 pip retraces , trader will be taken out of a 500 pips move.

 

[new_trader]

All these small stop stuff is for amateurs.To win against the market , you have to not let them take pips from you.

Tight stops are used by efficient & proficient traders and ought to be used by newbies as well.

SOCRATES explains it like no other person can: I strongly advise you pay attention:

Some time ago the question of stops was being discussed.

Again, when I commented incisively on it, it served to stimulate the rowdy element as well.

Without going into deep details I explained that efficient traders use very tight stops because efficient traders get it right many many more times than they get it wrong, that is why they are efficient traders, OK ?

Therefore efficient traders are surprised and shocked when they get it wrong. The fact that they use very tight stops immediately limits losses.

Inefficient traders are apt to use wide stops and some blighters none at all !
They now begin to argue, yes argue, that to use a wide stop is the right thing to do because it allows a position to "breathe" and other nonsenses. When it is pointed out that wide stops used by inefficient traders who get it wrong often and really ought to fiercely control losses, they get abusive, or, begin to argue.

That is why I have so many posts under my belt. I have tried in the past to illustrate lots of ideas. These ideas are immediately recognised by a few who go on to use them beneficiallly which pleases me enoromously. The great majority see fit to argue and argue and do not progress.

I am accused of being among other things, a charlatan, a wordsmith, an autocrat, etc.,

The problem is that a lot of people forget about the message being delivered to them and only concentrate on the way the message is delivered and so miss the content altogether.

 

[15 min tlb]

Tight stops are used by efficient & proficient traders and ought to be used by newbies as well.

SOCRATES explains it like no other person can: I strongly advise you pay attention:

I was referring to efficient trend traders who like to run their profits in high volatility trend breakouts , some trends require 200 pip trailing.

Tight stops is not good for high volatility trends.

 

[15 min tlb]

Tight stops are used by efficient & proficient traders and ought to be used by newbies as well.

SOCRATES explains it like no other person can: I strongly advise you pay attention:

There is a clear lack of misunderstanding of price behavior amongst gurus.Maybe these gurus are on rebates from brokers.

If a price goes lower or higher , it generally retraces to demand supply line , plus there are more false and random price set ups which fail , than succeed , so most new traders are going to lose any way .They got better chance with wider stops.Tight stops make brokers reach without hunting .

Don't play the game of the 95% losers , they play into this snake oil.

 

[new_trader]

Efficient and proficient traders understand 3 things:

1) When to go long.
2) When to go short.
3) When to abstain.

The size of the STOP is dependent on the skill of a trader and completely independent of market gyrations. I am speaking directly from experience. The size of my STOP has not changed in the 6+ years I have been trading. This includes the period of the Global Financial crisis, The Sovereign debt crisis, the flash crash, the US debt downgrade and the Fiscal cliff pantomime just to name a few.

Numbskulls in this forum try to tell me and others that trading the ES with a stop size less than 2 points is impossible....or that stops sizes need to be adjusted according to market conditions. Not only is this incorrect, it is detrimental.
Newbies lack the experience required judge market conditions correctly and so have a natural propensity to widen stops to keep them ‘safe’. This defeats the very purpose of the STOP which is to limit losses due to misjudgement of the market.

This post from SOCRATES is perhaps the one that had the most profound and positive impact on my trading. He posted it on Apr 11, 2006, 9:36pm which is when I read it. It is now 9:13 AM on 10 March 2013.

There is no argument. SOCRATES is unconditionally 100% correct.

Because this is a profession and not a pastime, it requires the development of skill. This skill has to be underpinned by knowledge. And this knowledge has to be a vast pool from which to draw, because at any given moment any component of this pool has to be accessible in an instant, without hesitation of any sort, to be able to properly identify what is a real opportunit;y, against a very convinving mirage to be avoided by abstention, or by opposite response, as appropriate.

Now in simple terms, what happens is that none of us are born knowing. If we were, everyone could and would succeed immediately, which is not the case. In consequence of this obstacle, we have to undergo a process of learning to teach ourselves. This is a gradient which can take a very long time to climb, but I promise you, there is an ultimate end to it. It feels like climbing a mountain and finally getting to the summit, where there is no more mountain to climb but the reward is a sort of anticlimax, like the view the climber is entitled to enjoy.

Throughout this long climb, the act itself of climbing causes the climber to teach himself to climb more effectively. A seasoned climber who has climbed many mountains will climb more effectively than a new climber. Let us transpose this idea to trading. What I am imparting to you is that persistent attempts lead to improvement in ability.

Commensurate with the level of ability is the capacity to undertake what we shall call missions. Fortunately there are only three, Long, Short and Abstention. It could be worse, so we must be grateful there are only three possibilities, three options in this regard.

As the level of ability rises, together with the rising of this level and harmonious with it also three things develop. These are choices. Because they are choices they cannot be mechanised, they cannot be fudged, and they cannot be altered, because they are the expression of will. They constitute committment. As they constitute committment, once committed they cannot be undone, which is what makes this profession unique.

But what happens is that through the gaining of proficiency, these three choices do not exactly take on a life of their own, but evolve and become more and more accurate, and more and more refined.

I am specifically referring to Timing, the Point of Entry and the Point of Exit.

When the market begins to "talk to you" instead of just baffling you, the Point of Entry selects itself for you and the Timing is the right one. In consequence of this, you repeatedly and confidently experience the position going in your favour immediately. The stop, which is a crucial safeguard for everybody, is now quickly left behind. With progressive increases in proficiency leading to accurate entry and perfect or near perfect timing, the stop can now be narrowed and squeezed to the limit, taking into account the spread. The other thing that happens is that the exit point becomes clearer and clearer, as you begin to detect exhaustion or imminent reversal.

One percent of capital employed is a vast amount to risk. One fifth of this figure is what you should ultimately aim for or thereabouts.

But in the very early stages in your development as a trader you should begin to cultivate the use of tighter and tighter stops as you progress, because not to do so constitutes dereliction of control. Ultimately risk is about being able to control unforseen losses.

Nearly all of trading is about control. The most important aspect is the control the trader places upon himself to start with. With attainment of progressive proficiency over time, you will see and experience that everything else takes care of itself and falls into place neatly.

The price you have to pay is self governance of absolutely the highest order, and nothing else.

I therefore do not agree with theories involving wide stops or stops placed under the last reversal and such other tripe, I maintain that the trader has to assume complete and utter responsibility for his decision, all else is an excuse.

This attainment of self governance of the highest order is the single most difficult discipline most people have difficulty in mastering. You must take steps to master it, otherwise it will master you, with dire results.

I hope and expect that this comprehensive explanation serves to satisfy your query.

 

[15 min tlb]

Efficient and proficient traders understand 3 things:

1) When to go long.
2) When to go short.
3) When to abstain.

The size of the STOP is dependent on the skill of a trader and completely independent of market gyrations. I am speaking directly from experience. The size of my STOP has not changed in the 6+ years I have been trading. This includes the period of the Global Financial crisis, The Sovereign debt crisis, the flash crash, the US debt downgrade and the Fiscal cliff pantomime just to name a few.

Numbskulls in this forum try to tell me and others that trading the ES with a stop size less than 2 points is impossible....or that stops sizes need to be adjusted according to market conditions. Not only is this incorrect, it is detrimental.
Newbies lack the experience required judge market conditions correctly and so have a natural propensity to widen stops to keep them ‘safe’. This defeats the very purpose of the STOP which is to limit losses due to misjudgement of the market.

This post from SOCRATES is perhaps the one that had the most profound and positive impact on my trading. He posted it on Apr 11, 2006, 9:36pm which is when I read it. It is now 9:13 AM on 10 March 2013.

There is no argument. SOCRATES is unconditionally 100% correct.

It is quite clear from this post , that Socrates does not trade probabilities , and trading is a probability game.Many numbskull gurus advocate 10 pip stops , and they believe 20 is worse , but they are clueless about stops , probability of stops getting hit , spikes , stop hunting and price behavior.

 

[BeginnerJoe]

The size of the STOP is dependent on the skill of a trader and completely independent of market gyrations.

Show us your skills and call out a trade. It's no use saying socrates this socrates that. He's not around and for all we know he's bankrupt and living under a bridge.

 

[15 min tlb]

Show us your skills and call out a trade. It's no use saying socrates this socrates that. He's not around and for all we know he's bankrupt and living under a bridge.

Maybe he was just all talk and not live trading calls in real markets.

The Probability of a Stop Loss Being Triggered

 

[new_trader]

Show us your skills and call out a trade. It's no use saying socrates this socrates that. He's not around and for all we know he's bankrupt and living under a bridge.

You're missing the point, completely. As SOCRATES would say to people who asked him for proof, you need to prove it to yourself, which I did. I never asked him to call a live trade when he posted back then and it is irrelevant to me what financial state SOCRATES is in right now. It's up to you what you do from here.

Besides, I have called out many trades if you care to look, I am not going to take you by the hand and lead you.

P.S: I have been to Amsterdam and I am telling you it is a great city to visit. I am not going to show you photos to prove I have been there, go and see it for yourself.

 

[the hare]

Show us your skills and call out a trade. It's no use saying socrates this socrates that. He's not around and for all we know he's bankrupt and living under a bridge.

You are funny

 

[BeginnerJoe]

I am not going to take you by the hand and lead you.

Nobody is asking you to lead anyone. You claim to be able to enter trades with extremely tight stops and have the price move in your favour immediately. Well let's see it.

The only other person who claimed to be able to do that was Mr Charts, and he's been back peddling on that lately. That leaves just you who can do it. So, let's see it.

 

[BeginnerJoe]

You are funny

Don't worry. I won't ask to see your skills. Your skills at hitting 10 loosers in a row immediately is almost a certainty. No need to see it because I know it will happen.

 

[barjon]

............ and trading is a probability game...........

Some might say - socrates amongst them - that it is a knowledge game. He traded (trades?) explosive momentum which he "knew" was coming from what had gone before and from how the move started off.

 

[new_trader]

Nobody is asking you to lead anyone. You claim to be able to enter trades with extremely tight stops and have the price move in your favour immediately. Well let's see it.

The only other person who claimed to be able to do that was Mr Charts, and he's been back peddling on that lately. That leaves just you who can do it. So, let's see it.

You asked me to post live trades Joe. I HAVE done that. YOU go and find them.

 

[the hare]

The only other person who claimed to be able to do that was Mr Charts, and he's been back peddling on that lately. That leaves just you who can do it. So, let's see it.

There are a couple of people here who could demonstrate this to you, but no one is going to waste time showing you anything.

You could look at the last call I made here at the zoo if you really wanted to prove to yourself that its possible. Not that I trade that way these days for reasons you might work out in about 70 years or so at the rate you are progressing

 

[15 min tlb]

Some might say - socrates amongst them - that it is a knowledge game. He traded (trades?) explosive momentum which he "knew" was coming from what had gone before and from how the move started off.

Those who trade technical analysis knowledge game are more likely to be trade more emotionally as t/a is not a perfect science, whereas in probability trading there is less emphasis on outcome and emotions on each trade .The real pros are likely to trade fundamental knowledge with technical analysis , but with less emotions and more knowledge.

 

[BeginnerJoe]

There are a couple of people here who could demonstrate this to you, but no one is going to waste time showing you anything.

You could look at the last call I made here at the zoo if you really wanted to prove to yourself that its possible. Not that I trade that way these days for reasons you might work out in about 70 years or so at the rate you are progressing

I am not asking anyone to show. I am asking those who make such claims to back it up. As you don't claim to be able to do it currently, I see no reason for you back up what you don't claim.

The market opens in 12 hours. All those who claim to have explosive trades should make a call. Then we'll see how much of an explosion we get.

 

[barjon]

Those who trade technical analysis knowledge game are more likely to be trade more emotionally as t/a is not a perfect science, whereas in probability trading there is less emphasis on outcome and emotions on each trade .The real pros are likely to trade fundamental knowledge with technical analysis , but with less emotions and more knowledge.

You keep talking about these "real pros" and what they do. Is that what you imagine they do, or do you know for certain? Most of the pros I know don't even look at a damn chart.

 

[15 min tlb]

You keep talking about these "real pros" and what they do. Is that what you imagine they do, or do you know for certain? Most of the pros I know don't even look at a damn chart.

I imagine they look at a chart for confirmation and entry on momentum , that their fundamental analysis are correct and it agrees with the market.There was a fundamental trader who was long gold at 435 , bailed out at 375 and lost out .He was not looking at charts.It is important for fundamental anylysis and entries to be in synch with the market , and this done with charts.

 

[Liquid validity]

I am not asking anyone to show. I am asking those who make such claims to back it up. As you don't claim to be able to do it currently, I see no reason for you back up what you don't claim.

The market opens in 12 hours. All those who claim to have explosive trades should make a call. Then we'll see how much of an explosion we get.

NT is talking about this type of event:
http://www.trade2win.com/boards/general-trading-chat/131664-indices-3.html#post1639890
Thats not a call, just an observation made at the time of something
that was blindingly obvious.

Those kind of things happen with various durations and predictability.
I do agree with NT that it is a very efficient way to trade.

As the Hare also intimated, it also depends on what your goals are,
to maximise efficiency or minimise time input (realtime basis at least).
You quite simply cannot have both.