stop loss

wins71

Junior member
17 0
got liquidated today 2k+ not a good feeling. had made a series of consecutive trades last using market volatility last six weeks that was working for me and made 600 quid. I would trade the FTSE up or down between 5 and ten points whenever i saw the DOW close either up or down at 10-20 SB per point leaving 1K free equity to cover for fluctuations. and go about my daily business. In so doing i was making between 60-100 quid profit regularly. never used stop loss before because felt it would stop gains. Made a similar trade setup today expecting the ftse to rise at least 15 pts based on massive rise in dow but markets turned against me and got wiped out.

Seems that i will have to use stop loss after all.
my question how do you set a stop loss per trade and what trade size would that be for the equivalent stop loss. Hope i havent confused everyone. i ask this because i feel that intraday volatility always tend to take out your stop before your profit target is reached.
 

wins71

Junior member
17 0
guys, do you think i should drop right back to 1£/point with a wide stop loss and try for regular much smaller profit like 10-20£ per day instead? your views.
 

Grey1

Senior member
2,186 178
Risk analysis is the name of the game my friend.. It is often confused with Money managment... Trading like any other profession needes education, ..I strongly suggest to read about ENTRY and RISK..... There are a lot of info on the web if you seriously want to become a trader ..
 

stevet

Established member
917 5
the concepts of risk/reward ratios with stops and target levels has such big holes in it that it is hardly suprising that overtime your money will fall right through it and straight down the drain

not too sure what money management is - or is for? - dont u just put on your normal bet - and if it is all goes real good,, you just add to it , and cut and run if the market decides it wants to bite

if it has been written about - you can be sure the writer made his bucks from books and not trading - but it is still important to read all the books so you can find out exactly what knowledge did not help succssful trading

trade small and enjoy losing while you learn - trade large and enjoy winning after you have learnt for sure
 
Last edited:

brumod

Junior member
10 0
2k is in my eyes a big sting,
however the FTSE did go very unusually pear shaped and youll find most who traded it came out badly.
I managed to recoupe on the dow but had moments of sweaty forehead. I am sure there is a good method of making a consistent £20-£30 a day but the problem is greed which snares the best of us.
 

options

Senior member
2,374 218
:eek:
I had begun to write a fairly lengthy reply and near the end pressed the wrong button and sent the computer to sleep, losing the connection. :eek: Oh well. At least it wasn't a trade entry.

Anyway. Wins71. Sorry to hear about your loss. It is a gut wrenching feeling to turn on the screen and see you have been wiped out.
And all because you didn't have a simple stop in place. This is what hurts you the most right now.

Should you change order size etc. I would say no because you seem to have been using something that appears to have been working for you. But it all depends on how deep your pockets are. If this is a minor hicup you can stand and the only thing that hurts is your ego, keep it as it is, but if you have suffered in the pocket, then yes. This is because you have been doing it right you see.
But I would change one thing and use that stop without any shadow of a doubt. Even if you use it as an emergency stop.
It would have been better to lose 1k rather than 2K.

Agree with the daily market fluctuations. You know how it works so I won't go into detail. But by placing your stop outside the market action will keep you in the game. (Most of the time.)
You may have to look at a chart and go back 1,2,3,4 or 5 days to see where the market has been and place your stop outside of this. If you watched the screen all day you could move the stop as and when you wanted, but seeing as you 'go about your daily business' you have to find a comprimise. I often don't use a stop on early trades, prefering to use a mental stop to start with then use a placed stop as the trade progresses, But I'm one of the sad gits who sit in front of a screen all day.


"my question how do you set a stop loss per trade and what trade size would that be for the equivalent stop loss. Hope i havent confused everyone. i ask this because i feel that intraday volatility always tend to take out your stop before your profit target is reached."

Well that has confused me, But I will asume this. You trade at £5 per point, your stop is for £5 per point, placed wherever you want it.
You may find it better to 'swing' over a couple of days or so.
The open move is good to trade but you really have to be there. Even better if you want to close out at a projected profit is something like a bracket order that IB do. This is from their site:


"Create Bracket Orders

Bracket orders are designed to limit your loss and lock in a profit by "bracketing" an order with two opposite-side orders. A BUY order is bracketed by a high-side sell limit order and a low-side sell stop order. A SELL order is bracketed by a high-side buy stop order and a low side buy limit order. For example, if you create an order to buy 100 shares of ABC at $50.00/share and then select Create Bracket Orders, TWS creates both a sell limit order for $51.00, and a sell stop order for $49.00.

The order quantity for the high and low side bracket orders is the same of the quantity of the original order. By default, the amount off the current price to which a bracket order is set is 1.0. This offset amount can be manually changed on the order management line for a specific order, or you can modify the default offset amount using the Default Order Settings box.

To create a bracket order

Click the "Ask" or "Bid" price of an asset to create an Order Management line.

Click the Ask Price to create a Buy order.

Click the Bid Price to create a Sell order.

On the right-click menu, select Create Bracket Orders.

Verify that the order parameters are correct.

Transmit the order.

NOTE: Bracket orders are considered one transaction. When you transmit one of the orders, all three orders are transmitted."


Oh, and don't make the mistake of thinking that the ftse always follows what the Dow does for the most part yes, but as you have found to your cost, it does have it's own mind sometimes. In fact the dow often duplicates what the ftse has done when it opens in the afternoon and then takes over.
good fortune.
 

stevet

Established member
917 5
wins71

i thought u meant that you got liquidated at some sort of mimimum trading level of 2K - so could not trade more - really hope you did not lose 2K and that was all the money in your acount

taking the long view - which u gotta - trading is about learing - and whilst i would always suggest someone trades small size with a spreadbettor to learn - i also suspect that no pain, no gain - but pain is pain and who wants that shit

anyway, just my view, but it is really important in trading that you never feel you have found some edge and then feel that the proof you found it is that it works - the reality is that the markets either take a small bit - or they give a small bit, but with the plan to always take double back

intra-market trading is a great way to trade - but it has its own rules and methodologies and it needs a lot of experience and understanding of the dynamics of each of the markets you are depending on for you analysis - it just aint gonna be something u can do without 2 or 3 years experience under your belt, either just trading or watching - what you learned by doing it is worth a million dollars - but i guess that is not how u see it now, but i guarantee you will think more about what happened and figure out what went wrong and add a new parameter to the trading

and it is real important not to use stops as a protection for a trade - if u are using a fixed stop to support a trade, something is wrong - because every stop has to be dynamic to the market action - and whenthe trade breaking down - cut and run and come back to fight another day - a fixed stop based on some prior point or risk/reward basis will just take u out big time over time

and the same for your exit point - setting prior points will just diminish winnings over time and diminsh the profits that you inevitably need to set against losses for a positive P&L

losing is shit - but unfortunatly u wont find one successful trader who did not lose and really suffer - but that suffering really focuses the mind to make sure that everytime you put a trade on - that you are trading and not gambling
 

options

Senior member
2,374 218
Presuming wins71 is using speadbets, and he is doing other things rather than watching the screen, isn't his best option to use a fixed stop?
Agreed, a dynamic trailing stop would be better, but are there any sb firms that cater to this?
 

stevet

Established member
917 5
the problem is that in trading, someone starting out should not just decide to trade a certain way to suit their lifestyle or seek a style that seems less stressful or even easier, there just are no easy ways and no second places in trading

of course there are different trading methodologies for experienced traders - but for those who are learning - the only way they are going to learn is stay glued to the screen and reactive to what is happening on the screen

its real hard to make money trading - and trading with a spreadbettng company makes it harder - spreadbetting is for either gamblers or for someone who wants to make money trading and uses spreadbetting as a cheap learning method, and is able to distinguish those losses due to their own trading style and those losses due to problems inherent in using spreadbetting as the trading medium
 
Last edited:
 
AdBlock Detected

We get it, advertisements are annoying!

But it's thanks to our sponsors that access to Trade2Win remains free for all. By viewing our ads you help us pay our bills, so please support the site and disable your AdBlocker.

I've Disabled AdBlock