should the stop be greater than the limit ?

[wallstreetwarrior87]

Guessing implies you even know it exists! I can remember a time when I wasn't even aware of the existence of many aspects of trading and continued on in blissful ignorance of some fairly crucial pieces of information...

Anyway, Prague was -7 last week. Good to see the UK is warmer.

Make sure you have sun lotion on when you go out, dont want to get burnt

Continued progress to you sir!

 

[new_trader]

Get rid of the limit order !

 

[robster970]

Get rid of the limit order !

Huzzah!

 

[cablemonster]

lulzy.

 

[BeginnerJoe]

Anyone allowing their winners to run today, or are you constrained by your stop/limit ratio to the 5th decimal place ? Here's mine running quite beautifully.

If I had the balls, it's days like this I could become an instant millionaire.

 

[Pat494]

My wish list for my broker would include the ability to set stops and limits having set them on a % or other basis. Not have to spend 2 minutes recalculating.

 

[Liquid validity]

The timed exit people have given their view.

BTW I'm not pure timed exit, that only applies if no other exit trigger has tripped.

 

[Liquid validity]

Without a blueprint in your mind of how price should move (taking news events into play, ie stay out) you will always be a prisoner to statistical results.

Good post overall, personally though I don't mind being a prisoner to
statistical results, as that, for me at least is better than being a prisoner to
my own psychology, screens and crap attention span.
Thats a personal trade off I'm willing to accept.
Each to his own and all that

 

[wackypete2]

BTW I'm not pure timed exit, that only applies if no other exit trigger has tripped.

Agree.
I don't use pure timed exits either but since I am a short term trader if price just stagnates for a while (no matter if I am in profit or loss) I will usually exit and move on or look for a better entry. I don't like being in a trade for long periods of time as that increases event risk which is a separate issue altogether.

I handle the trailing stop dilemma by often moving stops to BE at an appropriate point. A lot of people here don't advocate that, which is fine, there's no 1 size fits all style of trading. It's important for me to keep losses to a minimum. If I have a reasonable trading plan then the wins will come.

Peter

 

[Liquid validity]

I handle the trailing stop dilemma by often moving stops to BE at an appropriate point. A lot of people here don't advocate that, which is fine, there's no 1 size fits all style of trading. It's important for me to keep losses to a minimum. If I have a reasonable trading plan then the wins will come.

Completely agree.
Thats probably the most important aspect of all.
Tailoring an approach to suit yourself.

 

[BeginnerJoe]

I have just formulated a new rule for exit: always lock in 1% account growth, although not necessarily exiting at the same instance. The effect of this will be in nuclear proportions over time.

 

[samirs]

I have just formulated a new rule for exit: always lock in 1% account growth, although not necessarily exiting at the same instance. The effect of this will be in nuclear proportions over time.

what does the highlighted line mean exactly. can you please explain with example.

 

[BeginnerJoe]

what does the highlighted line mean exactly. can you please explain with example.

Explosive, like, you know ?

 

[0007]

if price just stagnates for a while (no matter if I am in profit or loss) I will usually exit and move
Peter

Agree.

I have just formulated a new rule for exit: always lock in 1% account growth, although not necessarily exiting at the same instance. The effect of this will be in nuclear proportions over time.

Agree - not necessarily that figure (it all depends!) but grab what is there as rec'd by Pete above, mounts up the profits just nicely. Especially in a non strong-trend market or one like now that I don't trust.

 

[Shakone]

My feeling is that despite the general truth of the idea that profits should be greater than losses, and I subscribe to this view, anyone who says at no point during the trade is the profit potential less than the loss potential is often kidding themselves. As in the example I gave, you are up in a particular trade, price is close to your target, risk:reward is horrendous, but many will consider it from the initial trade entry. But the reality is different. The PnL doesn't just exist when it becomes realized as a profit or loss as most like to think. It is a profit or loss in the moment. You are holding a bad risk reward trade. Nothing wrong with that if the probability of it hitting target is high enough. But is it?

Ideally you would at every point in time have the exact probability of it hitting target versus stop and make a decision based on that and whether the expectation is positive. In reality you can never know that probability at all times. i.e. I have trade results which say I win 37% of the time with 1:2 risk reward. But given I've entered and am currently up 5 points, what is the probability for the new risk reward? Next, suppose it's just lost a point, where should my stop and target be etc. Not easy that. It is like requiring an edge at all times, not just on entry.

 

[the hare]

Ideally you would at every point in time have the exact probability of it hitting target versus stop and make a decision based on that and whether the expectation is positive.
.

the position "at any point in time" is effectively equivalent to a random entry taken at that point in time

So if you can apply this logic to trades based on some sort of technical or fundamental trigger, why cant you can apply the same logic to random trades ?

Understanding the answer to that question is usually what divides the winners from the losers.

Of course those of us who focus on random systems have to think about (and test) this stuff, and that's why we do it !

 

[BeginnerJoe]

the position "at any point in time" is effectively equivalent to a random entry taken at that point in time

So if you can apply this logic to trades based on some sort of technical or fundamental trigger, why cant you can apply the same logic to random trades ?

Understanding the answer to that question is usually what divides the winners from the losers.

Of course those of us who focus on random systems have to think about (and test) this stuff, and that's why we do it !

If every trade is random, why do you believe your random is better than their random, and why coin tossing some how makes it a superior random ?

 

[robster970]

I was reflecting on your realised/unrealised gain comment and ironically, what I said and what I do are two completely different things.

Take this morning on ES (enclosed).

I have a view that ES is going to roll over a little and look for value again before it goes off to 1500. Reason? It failed to make a higher-high last night and post session sell volume on T&S was quite large. Contracts traded overnight at 8am GMT was higher than usual. So my bias was short and I selected obvious places like LVN's, yesterday's VPOC, etc to take a short when it looked like a strong move up was exhausting.

So I got in at 1486.50 shortly after it hit yesterday's VPOC. Now it sold off and moved into profit quite quickly but then stalled (low and behold, around 1pt). I had 1.5pts at risk (1488). What I did in reality was reassess the probability of the target being hit in this move (target 1484 minimum, watch what happens and trail if it continues south) and concluded it had a low probability and therefore exit.

So in fact, I do not view all trades in terms of an unrealised gain/loss throughout the life of the trade. I weigh the probability constantly based upon market information I have access to and adjust accordingly.

 

[the hare]

If every trade is random, why do you believe your random is better than their random, and why coin tossing some how makes it a superior random ?

Still stumbling around in the dark I see

Some trades have an edge, some set ups have a greater edge than others. But lets forget all that nonsense, that's the icing on the cake, and the easy bit really, its all covered at the zoo and elsewhere.

Before you can capitalize on that stuff there's a fundamental set of foundations that you need to firstly understand conceptually, and secondly, develop faith in those concepts to set you free enough to begin the next step of the journey.

Tossing coins strips away the multiple layers of garbage, and forces you to confront the real issues. Don't worry, if you stick around long enough you'll kind of get there.

 

[cablemonster]

I wonder what would happen if I tossed 100 coins for entry and used a typical retail stop/target of 20 pips? taking spread out of the equation by increasing the stop by 1 pip. So 21 pip stop and 20 pip target. Should be 50/50 right? I hazard a guess it would be like 30% win / 70% loose.