Using Stop Losses and Traders as GunSlingers:
"...I cannot believe the dream I just had, that woke me up--about trading stocks somehow associated with gunslingers. LOL."
And you know that gunslingers typically have a short life-span, right?
"...I'd like to discuss stops a bit more, and how you set them. People often have a rule such as lose no more than 20%; or they set just above or below obvious points of resistance or support, you say you don't do that."
That's WAY TOO MUCH rope, and why the 2B tests always nails 'em. This is exactly how they all puke, on a MARGINAL high or a MARGINAL low, when they put their stops just "beyond reach"...
"I can understand if you're trading the trend it isn't as "bad"--but the whole point of support and resistance is about gaps and in a sense stops, so where do you set them so that you don't get "taken out" on a "force" up or down by the mm's to the stops/gaps--or is it just a necessary evil you live with?"
The point of using stops is to protect capital; and in trading, there is absolutely ZERO perfection. John Magee talks about the concept of "necessary and sufficient", and that is good enough for me. We can't wring every last penny out of the trade. If you watch the PENNIES and focus on being "robbed by MMs", then you will end up giving back loads of DOLLARS. Do not let this stop you from protecting your account. Do not begrude the MMs for making money.
You need to read this: ispeculator.com
Teresa |
