[CType]

Hi,

Ive been searching the forum for a difinitive answer, and the fact that I can't find one is probably all the answer I need.

It seems that sometimes a trade gets stopped out, and then the price goes back to where you where expecting it to go when you entered.

The question is: Are professional traders just taking your shares cheap, or Is that really just the way the market moved that day?

If the pros are just taking your shares cheap is that considered part of the risk of trading? You just set your stop and hope they don't bother with it that day. The lack of any concern from this forum tells me not to worry about it. I would like to know what your opinion is of this practice, if it actually exist, and what can be done about it,.

Thanks
Bill

[Tams]

do you consider the volatility before entering a stop?

[Tiobingo]

My trade strategy always brackets an order, with a target and a stop. I will trade a 2nd position with a trailing strategy as well. Typically, as per my trade system, I enter a trade where my entire trade profile is predetermined; where my entry is, my fixed target, my initial stop.. also, how I manage the trade as it progresses. Where price has to go to trigger some trade mgt rules; reducing risk, locking in a little bit of profit, exiting a position at my predetermined fixed target, and then letting the remainder run with a trailing stop strategy.

My entire trade is a component to a greater tradeplan that acts as my roadmap each and every session. I know when I start my session, how long I trade for, and even have a dynamic, self adjusting daily goal setting strategy that guides me regarding my trigger to stop trading. My tradeplan allows me to quit positive on most sessions while also allowing me to take what the market wants to give me, vs what I want out of the market.

In the end, I have done my research to establish an edge in the market and that's what I trade and how I trade. The stops are a key part to the overall plan.

Hope that helps.

[CType]

Thanks Tams, I'm guessing by your answer you would just make sure the stop is reasonable, and not worry about stop hunters.

Yes I do, if you mean do I try and stay outside the potential price movement. I use 1.5 to 2 time ATR to place initial stops.

[Tams]

Originally Posted by CType »

Thanks Tams, I'm guessing by your answer you would just make sure the stop is reasonable, and not worry about stop hunters.

Yes I do, if you mean do I try and stay outside the potential price movement. I use 1.5 to 2 time ATR to place initial stops.

2x ATR is often within 2 standard deviation,
ie. there is a 95.4499736% chance the market will go there without any special MM effort to hunt you.

[BlowFish]

Originally Posted by Tams »

2x ATR is often within 2 standard deviation,
ie. there is a 95.4499736% chance the market will go there without any special MM effort to hunt you.

Im not sure you can conclude that (though may be wrong ). Within any sample 95% of the data will be within 2 standard deviations so assuming a normal distribution (market data is not normal but lets not split hairs), there is a 95% probability that any data will not be outside 2SD.

[CType]

Thanks Tiobingo. I'm getting the impression that I should be more concerned about where to place the stop then I am about getting stopped out by some market manager. That's what I really wanted to know.

[Tams]

Originally Posted by BlowFish »

Im not sure you can conclude that (though may be wrong ). Within any sample 95% of the data will be within 2 standard deviations so assuming a normal distribution (market data is not normal but lets not split hairs), there is a 95% probability that any data will not be outside 2SD.

trend bias will skew the distribution to the naked eye.