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Strategies & Market Trends : Trade What You See, Not What You Think
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To: Threei who wrote (31)10/15/2000 6:37:50 PM
From: booters  Read Replies (2) of 867
 
I was lucky in the 'use stops' department. Never had a problem with them. I guess my 'Fear of loosing' was always stronger than my 'Greed for profits'.

But.......I do not use stops in the same way that most think of them ( I don't think ) and would like to mention this for comments that might broaden some peoples ideas on how to use them if every body thinks this is valid.

When people ask me if I use stops I say I do not but that is miss leading in a way. I have set ups I use to enter a trade and set ups I use to exit a trade. But the exit is variable just like the entry.

I will use a simple example to explain. I may enter when a STOCH line crosses the signal line. Then exit when the STOCH lines backs off 2 tics. So I have a stop but as you see it is variable. All the testing I have ever done on this type of set up fails if a fixed stop or trailing stop is used.

I feel this is a valid way to determine 'Stop' or exit placement but is not what most people think of as a stop. I think it is important that new traders be able to use this type of stop when trying to develop a trading method and not be restricted to just the standard idea of a stop.

I would be interested in comments on this.

I will admit this type stop does have dangers for new traders. You must have the discipline to push the button since the stop can not be placed early. YOU MUST PUSH THE BUTTON and sometimes at very difficult times.

boots
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