[BennyHey]

I wanted to start a thread on stop placement. I know the most popular answer would be placing it behind the last swing high or low, but I wanted to hear what other ideas are out there. A few I know of are using ATR as a guide and using 2% of total acct size.

I know it is totally dependent on what type of trader you are, investor, swing trader, day trader etc. but I would appreciate any new ideas either that your using yourself or have seen or read about.

Best of luck guys can't wait to see some responses

[sep34]

The best way to know where to put your stops...is to Know and understand your setups so well...that way you will Know at what point your trade idea is wrong and that point should be your stop.

The chart you show, I agree most would place there stops there. An important factor, that most traders dont pay attention to, is when to put their stop there.

By the way Im a big believer (specially daytrading) of attaching a stop with every position, even if its a wide stop... at the least, it will be there in case something unexpected happens.

Regards..

[darthtrader3.0beta]

For my style that chart is a work of art. I would have been looking to short the break of the flag around 862, would have been trying to sell the ask hard and probly would have had to do it a few times before getting filled on the retrace. My hard stop would have been a bit tighter at the top of the green candle body but I probly would have already been out if it had tested more up in that area manually. I love breaks of flags like that with breakout potential because you can use a real tight stop risk wise but still have the chance at a big winner.
Would have booked profit on the test of the breakout, then that green bar that bounces off the breakout level would have taken me out though and I wouldn't have got the breakout with the second half of my position.

[Ants88]

Originally Posted by BennyHey »

I wanted to start a thread on stop placement. I know the most popular answer would be placing it behind the last swing high or low, but I wanted to hear what other ideas are out there. A few I know of are using ATR as a guide and using 2% of total acct size.

I know it is totally dependent on what type of trader you are, investor, swing trader, day trader etc. but I would appreciate any new ideas either that your using yourself or have seen or read about.

Best of luck guys can't wait to see some responses

To place a stop, I need to know where I sold from?

Where and what time on the chart did you sell?

[EsotericRule]

I'll echo Pappo's sentiments. "When" is crucial in making ones entries inviolable, not to mention the stops.

I view stops much the same way...protection against the 'sudden break' either way. Outliers are rare, and potentially costly.

[BennyHey]

Thanks for the info DarthTrader. Guys obviously your stop placement will depend on what style/time frame you are using to trade with(ie. daytraders will differ from swing traders who will differ investors) that said I am more interested with the methodology used that pertains to your individual style.

I know Larry Williams (Day trading) always closes all his trades at the close of the futures session(4:15est).

Hope all u guys have a great 08' and new year. I am looking forward to continued learning from my fellow traders and (hopefully) increased profitability.

May your limits be filled and your stops not hit.

Benny Hey Hey

[WRR]

Here is an interesting report on placing stops.

http://www.webtrading.com/specrpt2.htm

WRR

[BennyHey]

Thanks for the post WRR. "Drawdown Minimizer Logic" makes a lot of sense. The only potential problem might be that it does not take into account the current volatility of the market being traded.

Cheers