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Strategies & Market Trends : Systems, Strategies and Resources for Trading Futures
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To: Magnatizer who wrote (32226)8/31/1999 9:02:00 PM
From: SE   of 44573
 
Well, stops can take up a whole lot of space and generate a lot of heated discussion, of that I am certain. There is no right or wrong way to do it. I know for the mini, .25 is just too tight. .25 is the spread...so if you enter a buy one at 1322.25 with a stop at 1322.00, the ask is at 1322.25 and the bid at 1322.00 and you will buy one at 1322.25 and immediately be stopped out at 1322.00. Won't get you anywhere.

I think stops are dependent upon the system and trading style you are running. If you are short term going for two pointers, your stops have to be tight. IF you are positional and going for big points...your stops have to be wide.

Just as an example, my system currently is running profit goal of 43 points and stops of 14 points.

I think I would have to know more about your system and what you are trying to accomplish before I could come up with "my opinion" of what a stop should be. Some would persuasively argue the stop has to take into account the size of your equity stake as well.

So there is no simple answer. One theory, that might work well in choppy markets, is place it below the most recent low for a buy and most recent high for a sell....for whatever time frame you are working off of. You might want to take a look at that and see if that would work..... It is nothing more than you want the trade, buy side if the spoos are setting consitently higher highs and higher lows. Opposite for sell side.

I am certain Patrick would have some good sage advice in this department.
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