SB on Stock Indices

[Bono]

using stops is very complex and unless you are very experienced you will lose money by placing stops

intraday spikes are just signs of short term illiquidity in the underlying[/QU

Yes, this is a problem for me as without a stop in place a bad trade seems too run out of control and by the time I have had a chance too close the trade i'm into a big loss!!
But like you say it's complicated (and i'm not that experienced!) not sure what the best risk managment policy is??

 

[stevet]

learners confuse the use of "stops" with "exiting" a trade - you exit at the point that the positive reasons that caused you to enter a trade - have either gone to neutral or negative - and this is the same wether the trade has gone your way or against you

 

[Bono]

learners confuse the use of "stops" with "exiting" a trade - you exit at the point that the positive reasons that caused you to enter a trade - have either gone to neutral or negative - and this is the same weather the trade has gone your way or against you

Stevet thanks for your insight but at what point do you get out of a bad trade i.e if you open a position (with no stop) but the market goes against you quickly do have a set percentage for losses? or do you just close a quickly as poss?
Would you consider on the flip side adding a fairly distant trailing stop on a position in profit?
Lots of questions!!! apologies.....

 

[stevet]

you get out of a bad trade by not entering it in the first place

and if you entered the trade for the right reason - you would not consider it a bad trade if you exit without profiting - since you would be used to doing that on an ongoing basis - but knew that the profit from the trades that worked out - easilly exceeded the losses from the ones that went wrong

so if you had a specific and correct reason for entering the trade - you would know exactly when to get out - be that at a loss or a profit

learn to enter correctly and forget about stops

 

[Bono]

you get out of a bad trade by not entering it in the first place

and if you entered the trade for the right reason - you would not consider it a bad trade if you exit without profiting - since you would be used to doing that on an ongoing basis - but knew that the profit from the trades that worked out - easilly exceeded the losses from the ones that went wrong

so if you had a specific and correct reason for entering the trade - you would know exactly when to get out - be that at a loss or a profit

learn to enter correctly and forget about stops

Good point! had not really looked at it like that, more homework, less guess work,more patience!!
Thanks again...

 

[Splitlink]

kensitp,


So basically a guaranteed stop will make you feel more comfortable in your trade and every now and again you'll be glad you had it but you'll pay very dearly on the 95/100 trades where you didn't really need it. Much like an extended warranty on an electrical item which only has a 5% chance of actually breaking down but for which you paid 25% of the price for.

Remember, trading is all about probabilities.

Financial Spreads charges 0ver 7 times the bet, or the equivalent of 7 points!

Split

 

[Second income trader]

FTSE 100 trend as of 29 August

I'n new to Technical Analysis and keen to start swing trading the FTSE 100. I thought I'd use this board to outline my analysis and would welcome any feedback from those who are also taking a view on the FTSE for the purposes of short term trading (rather than intra-day trading). all comments welcome!

FTSE100 on upward trend.

Arguments for:
A double bottom that begin at the beginning of July has completed and a breakout occurred with a breach off 4430. A trend line up can be drawn from 16 Aug The 200 MDA has also been breached

Arguments against:
Volume associated with breakout appears low

 

[alliance]

Hi Ken,
Just a thot...there is a FTSE 100 August 2004 thread, where I think u have posted b4....maybe the best location to receive comments on above 🙂