The hard learned Stop Loss lesson

ryan1978

Junior member
11 0
Today I have to say Ive learned my lesson on stop loss.They warned me on here
to use them ,everyone uses them.I have been trading for 6 months now and never
used them .Didnt know about stop loss until a few days ago when i joined here.
I thought i would have the discipline to get out when i needed to.

But emotions got the best of me.I had to get back to even no matter what as i watched my money drain more and more .

Wouldn't accept a 600 loss no way,then it was 1500 nope gotta hold it will drop just watch any minute now -itl come back,ul see.By close yesterday i was under 2,500.So I thought ok hold and itl drop in morning.Stock opened 2.00 up higher,I still held it!
Stubborn stubborn stubborn!!!!
I said it will drop by 10:15 when market reverses.It went up another 1.00 finally I got out.Couldn't take the pain anymore.In one day from yesterday til today lost near $8,000.That's alot considering I had only 10k profit from trading at this point.
Guess ill start over this time I will use a stoploss and let the broker get me out
automaticly so there's no emotion.Guess i didnt have the discipline I thought I had.
They told me on here ur gunna blow ur account stop now.When they told me that I planned on a stoploss of .50 that i would do myself I never did hit that BUY TO COVER button.
Don't know If You guys post ur bad trades or major losses buy anyway
Learned my lesson hopefully.Maybe its not too late.Still have 2,000 left for now.
Tradings my only hope of quiting my job and having freedom.Now I feel so desperate.
 

fleetwood

Member
51 1
Unlucky mate, just try to think of it as the cost of learning.
Also maybe while your learning you should trade minimum stakes. At least that way your education wont be so expensive.
 

TheGoose

Well-known member
321 67
whatever you do don't quit your job until you have nailed the trading.
Don't feel desperate as you will chase it and are likely to make stupid trades.
Learn your lesson, reduce stake, use stops and try and build the account up slowly and consistenly
Trading isn't for everyone, no matter how good you think you could be at it
 

nile_croc

Active member
120 20
Trading is like being married, always be quick to admit when you're wrong.....

All kidding aside, use stops, always use stops. It's very hard to admit when you've got it wrong, but you have to, or you WILL be wiped out, period. The whole key is not to make money on every trade, but to make much, much bigger money when you do have it right, then you lost when you had it wrong.
 
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tomorton

Legendary member
7,443 1,007
Stops are essential but there's more than one sort, and as long as you have a system to get you out of a crashing position you could pick one that suits your temperament and style.

Money stop - gets you out when you are down so many $ or a percentage of your total capital, e.g. 2%
% stop - gets you out when you are x% down from a long entry (or x% up from a short)
Trailing stop - once in profit you move this one along behind your position, so that if it falls back x% or y points it will take you out.
TA stop - level determined by TA, e.g. breach of support/resistance, failure to confirm chart pattern etc.
TA momentum stop - point at which TA would stop telling you to enter (so why would anyone else)

Some work better for most people, some are pretty poor technique, but as long as you find a method and stick with it. It doesn't matter what colour your parachute is, as long as you have one. Don't enter until you have worked out where you will exit if it all goes wrong.
 

Technically Fundamental

Senior member
2,810 178
Pity you had to learn this way instead of on demo but at least you know now before you leave a trade on overnight and wipe yourself stright into razor-wrist territory.
Personally I wouldnt quit my job unless I'd been profitable for two-three years part time bringng in at least my salary but then you have a riskier attitute lol
 

Splitlink

Legendary member
10,850 1,232
There are so many ways that a site can crash, especially with spreadbetting companies, or the provider/computer can start to play up at your end.

That, apart from the unexpected price action, is a damned good reason to have a stop in place, right at the beginning of the trade.

This chart is Euro/GBP 5 min bars, 4th June. The wick on the 1230 bar measures over 70 points and the move was not over, it lasted for the afternoon.

Don't rely on telephone trading. If you don't see it happening you are not likely to phone. You are, probably, wondering what is the matter with the computer! Besides, I bet the switchboards were crowded.
 

Attachments

jokepie

Active member
125 7
:clap:
Today I have to say Ive learned my lesson on stop loss.They warned me on here
to use them ,everyone uses them.I have been trading for 6 months now and never
used them .Didnt know about stop loss until a few days ago when i joined here.
I thought i would have the discipline to get out when i needed to.

But emotions got the best of me.I had to get back to even no matter what as i watched my money drain more and more .

Wouldn't accept a 600 loss no way,then it was 1500 nope gotta hold it will drop just watch any minute now -itl come back,ul see.By close yesterday i was under 2,500.So I thought ok hold and itl drop in morning.Stock opened 2.00 up higher,I still held it!
Stubborn stubborn stubborn!!!!
I said it will drop by 10:15 when market reverses.It went up another 1.00 finally I got out.Couldn't take the pain anymore.In one day from yesterday til today lost near $8,000.That's alot considering I had only 10k profit from trading at this point.
Guess ill start over this time I will use a stoploss and let the broker get me out
automaticly so there's no emotion.Guess i didnt have the discipline I thought I had.
They told me on here ur gunna blow ur account stop now.When they told me that I planned on a stoploss of .50 that i would do myself I never did hit that BUY TO COVER button.
Don't know If You guys post ur bad trades or major losses buy anyway
Learned my lesson hopefully.Maybe its not too late.Still have 2,000 left for now.
Tradings my only hope of quiting my job and having freedom.Now I feel so desperate.
I know how it feels... but its OK... as long as you have learned your lesson... i lost 5K one day - first day - so i have been stung.. I had other issues... but whateve..
use stops... understand that you are playing with probability and risk and reward ratios.

your set-ups/ signals whata ever you use are your "suppose to be high probability trade" moving your way >50% times you put on the trade.

your risk and reward is your mix of stop loss and profit target.
manage your stop actively - specially in this volatile market. managing target on your winners is always the key to MAKE money in trading.

I know you know all this by now...and its the basics that is all you need.. one piece of advice .... keep reminding yourself about your weaknesses, until you dont have to.

"Trend is your ....."
cheers..

Guru
 

jokepie

Active member
125 7
Today I have to say Ive learned my lesson on stop loss.They warned me on here
to use them ,everyone uses them.I have been trading for 6 months now and never
used them .Didnt know about stop loss until a few days ago when i joined here.
I thought i would have the discipline to get out when i needed to.


Tradings my only hope of quiting my job and having freedom.Now I feel so desperate.
Oh by the way dont quit ur job before have much saved for... only will make you more desperate...
BUT and the big BUTT....its ok if you r a swing or position trader...if you r a day trader/ scalper kinds... part time is part time. full time is no joke..very different...get a long leave and try trading fulltime and see if it works... and then make your move.
 

Windowsill

Well-known member
305 39
Today I have to say Ive learned my lesson on stop loss.They warned me on here
to use them ,everyone uses them.I have been trading for 6 months now and never
used them .Didnt know about stop loss until a few days ago when i joined here.
I thought i would have the discipline to get out when i needed to.

But emotions got the best of me.I had to get back to even no matter what as i watched my money drain more and more .

Wouldn't accept a 600 loss no way,then it was 1500 nope gotta hold it will drop just watch any minute now -itl come back,ul see.By close yesterday i was under 2,500.So I thought ok hold and itl drop in morning.Stock opened 2.00 up higher,I still held it!
Stubborn stubborn stubborn!!!!
I said it will drop by 10:15 when market reverses.It went up another 1.00 finally I got out.Couldn't take the pain anymore.In one day from yesterday til today lost near $8,000.That's alot considering I had only 10k profit from trading at this point.
Guess ill start over this time I will use a stoploss and let the broker get me out
automaticly so there's no emotion.Guess i didnt have the discipline I thought I had.
They told me on here ur gunna blow ur account stop now.When they told me that I planned on a stoploss of .50 that i would do myself I never did hit that BUY TO COVER button.
Don't know If You guys post ur bad trades or major losses buy anyway
Learned my lesson hopefully.Maybe its not too late.Still have 2,000 left for now.
Tradings my only hope of quiting my job and having freedom.Now I feel so desperate.

Not knowing anything about how you trade, nevertheless, I am certain 99% positive, that using stops NOW, you will now find your success/hit rate will be much poorer. This unfortunately is part of the learning cycle.....:confused:
 

Rossini

Established member
916 132
Stops are essential but there's more than one sort, and as long as you have a system to get you out of a crashing position you could pick one that suits your temperament and style.

Money stop - gets you out when you are down so many $ or a percentage of your total capital, e.g. 2%
% stop - gets you out when you are x% down from a long entry (or x% up from a short)
Trailing stop - once in profit you move this one along behind your position, so that if it falls back x% or y points it will take you out.
TA stop - level determined by TA, e.g. breach of support/resistance, failure to confirm chart pattern etc.
TA momentum stop - point at which TA would stop telling you to enter (so why would anyone else)

Some work better for most people, some are pretty poor technique, but as long as you find a method and stick with it. It doesn't matter what colour your parachute is, as long as you have one. Don't enter until you have worked out where you will exit if it all goes wrong.
A time based stop would also be appropriate.
 

Windowsill

Well-known member
305 39
A time based stop would also be appropriate.
I would be very interested what you mean by this.....perhaps others would to? I follow the logic, that if nothing is happening you might as well get out and look for some volatility elswhere. Is this what you're alluding to?
 

cpngtw

Experienced member
1,525 18
I would be very interested what you mean by this.....perhaps others would to? I follow the logic, that if nothing is happening you might as well get out and look for some volatility elswhere. Is this what you're alluding to?
There are different time based stops. For example, after the entry you expect the price starts to move in one direction within 1/2 hours, so if you see the price doesn't do that then stop out after 1/2 hours. In forex you may want to use end of week stop, or in equities it maybe EOD stop. Or you could use Fib time stop. etc.
 

new_trader

Legendary member
6,231 1,282
There are different time based stops. For example, after the entry you expect the price starts to move in one direction within 1/2 hours, so if you see the price doesn't do that then stop out after 1/2 hours. In forex you may want to use end of week stop, or in equities it maybe EOD stop. Or you could use Fib time stop. etc.
You would enter a trade even though you expect nothing to happen for 30 minutes??? What an odd strategy. So much for patience and discipline...take a guess, enter your trade then cross your fingers and wait.:LOL:
 

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