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Strategies & Market Trends : Trade What You See, Not What You Think -- Ignore unavailable to you. Want to Upgrade?

To: booters who wrote (51)	10/15/2000 9:52:49 PM
From: Dan Duchardt	Read Replies (2) \| Respond to of 867

booters, Having blown a stop or two in my trading life, let me be bold enough or stupid enough to air the reason I think this happens to a lot of new traders. It comes from bad discipline, and all of those character flaws of course, but the tendency is reinforced by the frustration of accumulated stops that result in "lost opportunity". How many times have we been faithful to our discipline only to sell the exact bottom before a long trade we entered moves in our favor, or buy the exact top to stop out a short? As those events start to accumulate, and especially when not offset by a number of winning trades, it gets really easy to talk yourself into giving things more room, and then a little more and a little more. It seems obvious that if this is happening there is something wrong with how stops are being set, or something wrong with entries that result in so many positions making an initial negative move, or both. Along those lines, I am inclined to agree with you that simply touching a price point is often not a good criteria for executing a stop these days, or for making an exit on a winning trade. I don't have the answer, but of late my observation has been that the faster price moves toward a critical level, the more likely it is that level will hold, even if it is pierced, which means that jumping in on a mo mo wave is far too dangerous, and exiting on one gets you out of a lot trades that ultimately move in your favor. Anyone who has the solution to this dilemma has my ear. Dan

To: booters who wrote (51)	10/15/2000 10:11:22 PM
From: Threei	Respond to of 867

Boots, So I guess my point is this, a further understanding of stops or exit strategies is important and just an absolute rule, A STOP MUST BE PLACED, can actually kill a method and a trader can be loosing money while thinking he is doing everything correctly. Again I will say that for a new trader this is probably the best thing to do but make sure the rest of the method is in tune with it. Now that I have brought all this up I fear I have not explained myself well enough not to confuse many. Maybe some one else can chime in with a better explaination. My 2 cents on this... I believe you touched aspect that presents dangerous ground for newer traders and lies in "art" field more than in science... This aspect is: 1. Don't break the rules. 2. Know when to break the rules. As you said, by no means newer trader should go for #2 - he just doesn't know yet when to break the rules. He easy confuses it for wishful thinking. Even for experienced trader it's not easy and always carries higher risk. Thank you for great points brought. Vadym