price & stops

[wasp]

wasp

I thought the general view is that stops should be placed at the point where one would conclude that the trade is a wrong un.

If the price is gyrating pretty wildly 20 points (say) back and forth as it moves along
then I wouldn't consider 20 points against me after I'd entered as a wrong un. If, however, it was travelling more sedately with only 5 point (say) gyrations then I'd be calling wrong un well before 20 points was reached.

Your example is just one (successful) trade where Trader B clearly has the better result. A truer test is a series of trades where (if) Trader B has been several times stopped out and thus prevented from enjoying good moves, whereas Trader A has caught them. (hope I've got my As and Bs right )

good trading

jon

I see your point Jon but I haven't the enthusiasm at the moment to show more examples unless more people are willing to view the subject openly.

Granted, Trader B may be stopped out more than trade A, but thats not to say, just because trader A used wider stops, he will be right more than Trader B, that comes down to skill, experience and proficiency, only acquired through experience.

We are talking hypotheticals here and hypothetically, Trader B, get in 50 points better price, Trader B continued to use a larger position size and Trader B had less psychology to ponder as his position should have gone into profit sooner, easier and with less down side.

If the market is running along with a 20 point gyration, then it makes sense to me, to zoom in and try to catch the bottom part of those gyrations for the reasons outlined above.

The only reason not to I can think of is fear, doubt, laziness or half hearted efforts..

EDIT: If I held $1000 in my hand, said here is $700 and then threw the other $300 off down a windy busy street, would you make the effort to go after it?

 

[Bladerunner]

open mind and all ears

I joined T2W to learn, open mindedly about different ideas to approach the markets to return the best profit through skill, understanding and simple math.

Whether you think Grey1 or FW is being arrogant and/or ignorant (or vica versa) is your choice but trader_dante started a thread stating one should happily pay more for a loss on large move and I don't think its necessary.

Some agree with my thoughts, some with trade_dante.

I don't wish to start arguments nor a 'trade off'... just simple chart/math based reasons for one or the other and help each other, and all noobs, make a living in this business and I still do not see why, Trader A would be better off than trader B....... (Post 138)

I am all ears though.............

Hi Wasp

point taken, just thought it was getting a bit personal, and do not see any reason for that

the methods are so different its almost a crazy argument really anyway

fall out = no one gets to read anything of what could be value to them, even one point they have overlooked could be all it takes to get them on the right track

in real time its not so easy to trade off a tick chart or even the minute bars. In more normal conditions they very often run up and down their lengh many times before their close. In these conditions its ..........very fast

No thats stating the obvious to you but its not that obvious to someone looking at your ideal chart and entry.

Even then 2 pt stops = all ears myself Wasp

My opinion = best just to enter contra on the hour bar change(when at top or bottom of range thats easy identified) with the longer timeframe trend wk /day in support if possible.

Set your stoploss to 1 % of account and pick a reasonable target based on the hours range for your limit or limits

watch and learn and take it from there

The tick charts and minutes are ok if your used to them, but I for one, and I have looked at them till my eyes bleed see no advantage in them

disadvantages = Forget where price is in relation to higher more relevent tf, could lead to overtrading, watching and trading your PL, increase in emotional arousal during trade session, this can lead to less objective thought, this leads to blown accounts.

tight stops, watch an hour or a four hour bar form in real time then make your mind up how tight you can get your stop

(2 charts one with 1-3 min chart / 1 with your hour or 4 hour chart)

If you can trade that close in Wasp / fw

Its not required imho to make good money and I think many will suffer distress trying thats all

ATR :?: Tick charts and lower tf = does it not apply to them also (timeframe you trade)



good trading next week whatever way you decide to do it :clover:


Andy

 

[Jaydee]

A bit late joining this one guys, here's my thoughts:

I have an automatic maximum stop level set through my best efforts to understand the present volatility. I also use a manual stop which I will trigger based on my efforts to understand the current orderflow - this effectively allows me to shave a few ticks off my auto stoploss if I can get an earlier indication I am wrong sided.

So that's what I do...but, having said that, I have been going over my trades over the past month and the reason why I have underperformed is down to my exits not my entires or stops. Sure, I could have probably saved a few ticks here and there by having a slightly tighter stoploss on some of my trades but the result of this would have been negligable. The result of me only holding trades for 25-30% of the entire move has caused me to leave a large amount of profit on the table. Let's say I could have saved 30 ticks with tighter stoplosses - well, I left a couple of hundred ticks on the table in terms of my exits.

It's the exits that matter - they are the hardest to get right by a long way. I am not going to be so arrogant and say that stops and entries are easy, but they are a damn shade easier than exits and they make very little difference to your P&L in the long run. Whereas getting out of a move early is the most costly mistake you can make. I know what I'm focused on getting right.

All this tight stoploss talk is unnecessary as it makes such a small difference. If I had the choice, I would much rather be perfect at taking my profits than both entering and stopping out.

 

[trader_dante]

What are you talking about? Will you at least be consistent! You said a 400 point stop.

That would mean you are already in the trade on the wrong side and the market has moved against you, it does not mean waiting 398.75 POINTS later. Did you not understand my post.

I don't think you understood MY post. I simply meant if you entered long because of a support level and you had a 1.25 point stop and I waited for it to move off the support and entered 398.75 points later, then my stop has to go where your stop was (a 400 point stop) as we are really entering for the same reason but I am simply waiting for confirmation on a higher TF.

So yes, seeing it go 399 points against me still hasn't proven me wrong, while you tried, unsuccessfully, to make me look stupid by asserting it would have.

At the end of the day its a pointless argument. I trade with bigger stops and while I might be able to get a better and tighter entry, I am more than willing to pay a premium for more information and I do very well from it.

I've ran my trades with the technical reason behind them and the stop sizes necessary to take them, past the head of our firm, an extremely successful and skilled government bond trader and since he is backing me with his own money and everyone in the firm trades with tight stops, I don't imagine he would have a problem telling me to get a better entry and stop taking undue risk.

Since he is perfectly happy with my performance and I am usually in the move for longer, taking more ticks than most of my short term trading counterparts, I'm going to leave the argument with a quote from Ed Seykota: "What is true, is true for you".

Goodnight .

 

[wasp]

Hi Wasp

point taken, just thought it was getting a bit personal, and do not see any reason for that

the methods are so different its almost a crazy argument really anyway.....

Totally agree, no need for getting personal or for arguments for that matter... It's a discussion board for discussing different methods and I am as cool and open minded as a cucumber in a jazz bar with a martini until someone flat out tells me I am wrong with nothing but a university document to prove me wrong.

A bit late joining this one guys, here's my thoughts:

I have an automatic maximum stop level set through my best efforts to understand the present volatility. I also use a manual stop which I will trigger based on my efforts to understand the current orderflow - this effectively allows me to shave a few ticks off my auto stoploss if I can get an earlier indication I am wrong sided.

So that's what I do...but, having said that, I have been going over my trades over the past month and the reason why I have underperformed is down to my exits not my entires or stops. Sure, I could have probably saved a few ticks here and there by having a slightly tighter stoploss on some of my trades but the result of this would have been negligable. The result of me only holding trades for 25-30% of the entire move has caused me to leave a large amount of profit on the table. Let's say I could have saved 30 ticks with tighter stoplosses - well, I left a couple of hundred ticks on the table in terms of my exits.

It's the exits that matter - they are the hardest to get right by a long way. I am not going to be so arrogant and say that stops and entries are easy, but they are a damn shade easier than exits and they make very little difference to your P&L in the long run. Whereas getting out of a move early is the most costly mistake you can make. I know what I'm focused on getting right.

All this tight stoploss talk is unnecessary as it makes such a small difference. If I had the choice, I would much rather be perfect at taking my profits than both entering and stopping out.

Sorry to hear your exits are your problem but to deny entries their right place is a bad move.

Entries, risk, trader management and exit are equally important. imho

 

[Bladerunner]

I see

Many people read and endorse books written by traders having never seen them trade live, many will attest to the value of Jessie Livermore's accounts in Reminiscences of a Stock Operator but has Jessie Livermore ever posted a live trade here? There are reasons why some people demand proof of claims and others do not. I don't need to see a live trade by FW to endorse what he is saying. Do you see or do you not see? I do not need to see Grey1 post live trades either. I have read many things he has claimed cannot be done and they are simply wrong (not just what he says about STOPS). I have proven it to myself and THAT is what others must do but they are too lazy or thick headed...dunces...do you see or do you not see? People can’t cope with abstract ideas or concepts, they want trading lessons 101, they want somebody else to do the thinking for them. Those people get exactly what they deserve.

I deal in facts based on my own observations, I am sure you are correct nt

I can see very clearly where you are coming from


good day and all the very best with it


Andy

ps: please direct me to one of your excellent informative posts that are more than a concept and hot air so I can better myself with immediate effect


do you see the problem.............. do you ?

 

[Jaydee]

Sorry to hear your exits are your problem but to deny entries their right place is a bad move.

Entries, risk, trader management and exit are equally important. imho

Not saying that entries or stops aren't important, just wanted to emphasise that the opportunity cost associated with bad exits far outweighs the real cost saving of tightening up stoplosses by a long way.

 

[firewalker99]

I thought the general view is that stops should be placed at the point where one would conclude that the trade is a wrong un.

Barjon, have you thought about post #119 yet? Still curious about your answer

Your example is just one (successful) trade where Trader B clearly has the better result. A truer test is a series of trades where (if) Trader B has been several times stopped out and thus prevented from enjoying good moves, whereas Trader A has caught them. (hope I've got my As and Bs right )

I'll assume you missed it, because people seem very selective about what they choose to answer these days. But again, see post #123. I'll make it easy: just click here. Let me know which series of results you prefer.

 

[new_trader]

I deal in facts nt based on my own observations, I am sure you are correct nt

I can see very clearly where you are coming from


good day and all the very best with it


Andy

ps: please direct me to one of your excellent informative posts that are more than a concept and hot air so I can better myself with immediate effect


do you see the problem.............. do you ?

http://www.trade2win.com/boards/spread-betting/26236-charity-trade-29-08-2007-a.html

 

[barjon]

Barjon, have you thought about post #119 yet? Still curious about your answer

I'll assume you missed it, because people seem very selective about what they choose to answer these days. But again, see post #123. I'll make it easy: just click here. Let me know which series of results you prefer.

1. If that's tick chart it looks lovely sitting there as a static snapshot. In real time in current market conditions I suspect it's moving faster than a speeding bullet. Whether your finger can be equally fast to nip in at your dots.................Mine isn't.

2. Well, the way you presented it, fire, it's no contest

As I said earlier, I've no axe to grind on either side of the debate. I just know in watching the tape that price on ftse has been darting about alarmingly and - for me at least - has made tight stops untenable. So, right or wrong, I've widened them (day trading - not my eod swings) and I'm content to have done so.

good trading

jon

 

[firewalker99]

I assume Grey took his loss as per his method and moved on, bad call ....so what does that prove ? he was not an early Bear

It proves that he believed he could outsmart the market. The market is always right. Every trade you put on, there is a chance it will go wrong. When somebody says to my face "this will NEVER EVER happen", there's little room for doubt, is there?

He asks for live proof regards 2 pt stops or at least doubts it .......

And in case you missed it, I provided 4 (yes four!) elements of proof. Whether you choose to ignore that, is up to you.

Grey does not have anything to prove, you do fw imo,

You're right. Grey doesn't have to prove that you can trade profitable with 50 point stops. Sure you can. You can trade profitable with 500 too. Who cares? Wasp has given you a clear-cut example. If you choose to ignore that, fine. But argue about the message, not about the messenger. If you think I have something to proof, I've already told you I'm prepared to make live calls as I did in the past. It didn't make any difference then, and it won't make any difference now as it seems some people just don't get it.

Sure his only concern is that new traders will attempt it and end up overtrading and end up trading on emotions etc resulting in blown accounts

Which trader do you think will blow out first? The one who has 5 losing trades with a 50 point stop or the one who has 10 losing trades with a 10 point stop?! I'm flabbergasted by the logic that some people apply

your live trade calls are behind closed doors these days on this site, so who benefits from them fw ?

You need to keep up with facts. If the several hundred calls made in the public dow thread didn't satisfy you, than I honestly don't know what will. And I've stopped providing live calls & analysis on this site long ago Blade. When I moved my stuff elsewhere, you asked me where you could continue to follow me and I provided you with an answer.

As for 'behind closed doors', you were part of the live trading forum several times (with several nicks!). You said you didn't learn much out of it and didn't have the time to post a trade. I had no problem with that. I'm not sure what I've done to deserve this back-stabbing, but next time you come to me in a PM asking for advice, don't expect much in return.

 

[firewalker99]

1. If that's tick chart it looks lovely sitting there as a static snapshot. In real time in current market conditions I suspect it's moving faster than a speeding bullet. Whether your finger can be equally fast to nip in at your dots.................Mine isn't.

Unfortunately I couldn't post a "movie" of price real time. But those who are interested can always use a charting program that supports replay. Now you still haven't answered the question. If you put your stops below or above the last swing, how far are they away from your entry? How much ES points?

 

[new_trader]

. I just know in watching the tape that price on ftse has been darting about alarmingly and - for me at least - has made tight stops untenable. So, right or wrong, I've widened them (day trading - not my eod swings) and I'm content to have done so.

good trading

jon

Jon,

Remember

1) Long
2) Short
3) Abstain

If it is 'darting about alarmingly' why not abstain? Why risk your money when you are uncertain? Or does this make too much sense?

Anyway, I'm sure the Blades will have an answer for you and you will make millions..

Time for me to unsubsrcibe from this madness...

 

[barjon]

Unfortunately I couldn't post a "movie" of price real time. But those who are interested can always use a charting program that supports replay. Now you still haven't answered the question. If you put your stops below or above the last swing, how far are they away from your entry? How much ES points?

Oh I dunno, fire, for the sake of an answer around 920.67 and 929.06 (with adjustment for spread).

Now one for you. How long (approximately) did it take for that graph to form - left edge to right edge?

good trading

jon

 

[barjon]

.......................... Why risk your money when you are uncertain?...................... .

Not uncertain as to direction, nt, just catering for the volatile way of getting there.

good trading

jon

 

[wasp]

A bit late joining this one guys, here's my thoughts:

I have an automatic maximum stop level set through my best efforts to understand the present volatility. I also use a manual stop which I will trigger based on my efforts to understand the current orderflow - this effectively allows me to shave a few ticks off my auto stoploss if I can get an earlier indication I am wrong sided.

So that's what I do...but, having said that, I have been going over my trades over the past month and the reason why I have underperformed is down to my exits not my entires or stops. Sure, I could have probably saved a few ticks here and there by having a slightly tighter stoploss on some of my trades but the result of this would have been negligable. The result of me only holding trades for 25-30% of the entire move has caused me to leave a large amount of profit on the table. Let's say I could have saved 30 ticks with tighter stoplosses - well, I left a couple of hundred ticks on the table in terms of my exits.

It's the exits that matter - they are the hardest to get right by a long way. I am not going to be so arrogant and say that stops and entries are easy, but they are a damn shade easier than exits and they make very little difference to your P&L in the long run. Whereas getting out of a move early is the most costly mistake you can make. I know what I'm focused on getting right.

All this tight stoploss talk is unnecessary as it makes such a small difference. If I had the choice, I would much rather be perfect at taking my profits than both entering and stopping out.

.... The difference between Grey1's and my methods are; he recommends wider stops and reduced position size whereas I recommend normal position size and stops but better entries and as per my example, makes a difference of $2000.

So I think the extra concentration on stops = better entry is paramount for the bottom line.

 

[Bladerunner]

sorry missed that .........to much Fog on that thread

"

http://www.trade2win.com/boards/spread-betting/26236-charity-trade-29-08-2007-a.html

Quote:
Originally Posted by temptrader
Dear new_trader,

Hello again from that "thread" on citybulls.

Anyway, few first trades on good conditions doesn't impress me, but very well done anyway. I'll tell what would impress me: seeing when the conditions are going to be bad and abstaining for a day or two. I wouldn't mind someone devoting some information to read the signs of when you should NOT be trading at all.

"Sure temptrader, I will be happy to oblige.

There are two times when you should NOT be trading;

1) When you can't afford to and
2) When you can.


__________________
"Theology: An attempt to explain a subject by men who do not understand it. The intent is not to tell the truth but to satisfy the questioner."

-Elbert Hubbard"


sorry missed this one ............ to much Fog on that thread or at least thats wot I think it was


real good advice nt

Andy

 

[counter_violent]

Not uncertain as to direction, nt, just catering for the volatile way of getting there.

good trading

jon

Which is the point we reached some 80 posts ago....

does nt see or does he not see.

 

[Bladerunner]

All the best fw and good trading to you

It proves that he believed he could outsmart the market. The market is always right. Every trade you put on, there is a chance it will go wrong. When somebody says to my face "this will NEVER EVER happen", there's little room for doubt, is there?


And in case you missed it, I provided 4 (yes four!) elements of proof. Whether you choose to ignore that, is up to you.


You're right. Grey doesn't have to prove that you can trade profitable with 50 point stops. Sure you can. You can trade profitable with 500 too. Who cares? Wasp has given you a clear-cut example. If you choose to ignore that, fine. But argue about the message, not about the messenger. If you think I have something to proof, I've already told you I'm prepared to make live calls as I did in the past. It didn't make any difference then, and it won't make any difference now as it seems some people just don't get it.



Which trader do you think will blow out first? The one who has 5 losing trades with a 50 point stop or the one who has 10 losing trades with a 10 point stop?! I'm flabbergasted by the logic that some people apply



You need to keep up with facts. If the several hundred calls made in the public dow thread didn't satisfy you, than I honestly don't know what will. And I've stopped providing live calls & analysis on this site long ago Blade. When I moved my stuff elsewhere, you asked me where you could continue to follow me and I provided you with an answer.

As for 'behind closed doors', you were part of the live trading forum several times (with several nicks!). You said you didn't learn much out of it and didn't have the time to post a trade. I had no problem with that. I'm not sure what I've done to deserve this back-stabbing, but next time you come to me in a PM asking for advice, don't expect much in return.

1) it proves he had an opinion on it not that he ever traded it to destruction fw. You posted at me on the Dow thread in responce to one of my calls "the Dow would never get back over 13000" this side of .......so what, you were wrong .........not a biggggy fw , did not for one minute think you had lost it or it somehow reflected upon you as a person and as a trader. Thought it was pretty funny how defensive you got and you sure did not like the slippers and never acknowledged you had made a bad call

2) proof , sorry not seen any PROOF

3) make them, one mans meat = anothers poison, so long as your happy = keep doing what you do. Don"t think it really helps anybody fw but except I could be wrong on that one

4) depends on % of risk per trade compared to bank and hit rates I would have thought fw

5) No they did not fw, only checked a few because not really that interested in keeping up with pdh pdl pdc kinda trade method fw calls that are effected by lag to server and even then some were quite funny, some days you were so upside down it was hard to believe you did"nt work for a sb firm.......... or do you ? ......only joking imho of course fw everybody see"s it different but was quite an eye opener ..so I guess some thanks for posting them

no I am not going through the thread, I was happy with what I observed last summer 07 fw

6) I joined to see what you were up to, pm / afternoons = never traded it fw no time, several nicks = you new who I was and last nick had always expired, I never said I never learnt anything infact I never said anything at all or made any negative comment regards your little group.

Never asked you where you were going = you told me and made me aware of where you were going after another one of your little tiffs. I told you = not interested at all only ever been a member of T2W and not interested in anyplace else. Only Joined T2W proper when I was happy with my own method. Own method as improved since being active on the boards but it is no way down to anything I have ever read that you have posted fw, or pm"d me with for that matter

(joined traders lab to read one thread because kept getting bothered to join) (read it then removed membership)

7) "I'm not sure what I've done to deserve this back-stabbing, but next time you come to me in a PM asking for advice, don't expect much in return."

sorry you feel its a back-stabbing, thought it was more of a wake up call----Heads up myself. Your posting with the authority of some higher being at the moment and thought it was only right that somebody should draw your attention to it before you disappear up your own behind

what are friends for fw

your not entitled to dish somebody else fw and I do not see why you would expect others to back you up just because you pm"d them with your opinion on a question they thought you may be able to answer.

appreciated some of your answers to my pm"s ...........thanks, made me aware I was much better than I thought I was.

All the best fw and good trading to you :clover:

Andy

 

[firewalker99]

Oh I dunno, fire, for the sake of an answer around 920.67 and 929.06 (with adjustment for spread).

Okay. Seems sensible. That also looks to me like it's about 1 point away from the entry. Now tell me, how much is 1 ES point compared to the DOW?

Now one for you. How long (approximately) did it take for that graph to form - left edge to right edge?

If I said it was 1 minute, 1 hour or 1 day, would it make any difference? An entry is an entry. If you don't know before when or why you are going to take a trade, you can wait a long time for confirmation. On the other hand, if you know what you're looking for, then you take action when you see it. There's no need to wait 5 seconds, 5 minutes or 5 hours.