Stopped out by HOW MUCH?!

[moreliver]

What a gutter. Got caught in the recent pullback and got stopped out of a bet. So? Well, the low of the pullback didn't quite reach my stop loss. It seems I was stopped out by the width of the spread.

Two things to do next time, perhaps:

Firstly, what have we been told about setting stops on round numbers?

Secondly, however you calculate your stops -- ATR, pivots, % move, whatever -- add on the spread.

Any thoughts on that, you guys?

 

[tomorton]

First off, the numbers on the SB charts are meaningless for TA, they're just quotes, they're not pinned down by the participation of the market players going long / short. So there's no additional risk in setting your stop at 1000.00 on the SB book. But round numbers on the underlying instrument can be significant, so whereas the real market might turn at 1000.00, on the SB book, this could be something as 'un-round' as 1018.38.

I always try to let the TA tell me where the stop should be, and this means it often tallies with TA support / resistance. If its far off from entry, options are to decrease position size or just look for another market this time. And, yes, allow for the the spread (caught out that way myself too several times).

 

[Splitlink]

What a gutter. Got caught in the recent pullback and got stopped out of a bet. So? Well, the low of the pullback didn't quite reach my stop loss. It seems I was stopped out by the width of the spread.

Two things to do next time, perhaps:

Firstly, what have we been told about setting stops on round numbers?

Secondly, however you calculate your stops -- ATR, pivots, % move, whatever -- add on the spread.

Any thoughts on that, you guys?

That will always happen. Don't worry about it, keep your stops down to about 5,10, 15 points, whatever you think will not damage your account and stop worrying about calculating round numbers, etc. They will go, anyway. If for instance, your stop is 10 points and it gets taken, it's my experience that it will go further, so you may as well cut your losses early. Later, you may think it worth while to re-enter in the same direction again. The smaller your loss, the sooner you will get it back, again.

Yesterday I took 2 ten point losses but netted a profit of 40 on the morning. Today I have lost 20 points and my second trade is showing a profit, so far of over 12.

 

[Splitlink]

For instance Footsie is showing some kind of S&R line at 5745. Will it hold or go through? The answer is "no one knows" I'm short on FT at present and we will see what happens.

 

[SvenFoster]

I've been stopped out by 0.1 pip before and its just missed me by that much as well. Sometimes its just gonna happen.

 

[shadowninja]

It happens. Just accept it. The problem with not accepting it is that you get tempted to widen your stops unnecessarily (for the respective system you trade) or keep moving your stops back thinking that you don't want to be stopped out for a fake move or you just use no stops and your account gets wiped out in one go. (Note: things like not using a stop and averaging down can work but you have to really understand the best ways of using these techniques.)

 

[meanreversion]

Keep a diary of all your trades and identify how many times you were just stopped out and then it moved back again. But also be honest and mark those times when you survived by the skin of your teeth. I think it's human nature to dwell on the "if only" scenarios, whilst conveniently forgetting the fortunate incidents.

Ultimately, if you find you DO have too many "just stopped" incidents, it might argue for a lower frequency trading style?

 

[moreliver]

Thanks guys.

First off, I got an immediate sense of 'Hey, it's not just me!' Irrational but true.

Secondly, good points from tomorton, especially about round figures at SB charts. Thanks mate.

Thirdly, some good advice offered, considering how little I explained. Thanks to all of you.

moreliver

 

[shadowninja]

It's like Vietnam... except we were there, man.

 

[moreliver]

And just to rub it in, it's happened again. Stopped out with the price just above the stop but within the spread.

@rse.

Lesson learned.