>I have been taken out on stops too but if you buy at what you feel is the best price there should be no problem setting a stop below that - because if you're correct it will never be hit and if you are wrong it will protect you from second guessing yourself.<
Hi,
I think you've hit the key phrase when you said ".. if you buy at what you feel is the best price."
So, if the market agrees with your best price, your stop won't be hit. Otherwise, the stop is hit, and there is a loss.
Setting a stop after entering at the best price is the lesser of the two evils... between a loss, and a bigger loss. However, a loss is still a loss! So, it seems to me, the key to trading success is to focus on how to identify "the best price" prior to entrying a trade. If there is a holy grail set-up that can consistently lead to more wins than losses, then one's emotions would constantly be positive.
The big question is: "Are there such things as holy grail set-ups that will consistently lead to more trading wins than losses?"
In particular, within the time frame of 7 hours in a trading day, is the price direction of a stock predictable?
If it is not, then the next best thing a trader does is to set stop losses, hoping that if there are many small losses, they will be more than compensated by an occasional lucky ride on a trend win.
Is the above a fair description of a trader's life?
Are high probability set-ups more important than emotions?
Is the real culprit the unpredictable market rather than a trader's emotions?
Comments anyone? |
