Jump to content

Welcome to the new Traders Laboratory! Please bear with us as we finish the migration over the next few days. If you find any issues, want to leave feedback, get in touch with us, or offer suggestions please post to the Support forum here.

  • Welcome Guests

    Welcome. You are currently viewing the forum as a guest which does not give you access to all the great features at Traders Laboratory such as interacting with members, access to all forums, downloading attachments, and eligibility to win free giveaways. Registration is fast, simple and absolutely free. Create a FREE Traders Laboratory account here.

calamitychris

Down with Mental Stops

Recommended Posts

I thought I would post this just to make you glad that you put in your hard stops today. I just gave back two weeks of profits ($2700) today. Luckily I am still in the black and this loss is not debilitating but it was a good reminder to me that mental stops are BS.

 

My normal stop is 5 points but I thought that I would loosen the slack today given the fact that the S&P is teatering on major support. I had to leave my computer without putting in a stop order and when I returned I was down $1500. I decided to wait until the next major support zone but once that was compromised I finally bit the bullet at a $2700 loss.

:no:

I have only been trading for about 6 months, so if any of you veterans out there can give me some insight on stops, I would greatly appreciate it.

 

Happy Trading!

Share this post


Link to post
Share on other sites

You picked the right spot to set your stop, below support (assuming you were long above it). But you should put the stop as soon as you make your entry. You can always cancel and move it if you think it's justified. As MrPaul mentioned, some freaky incident like internet connectivity or power outage in one minute can be a hazard to your account. It's a lesson easy to solve but hard to execute until a big loss forces you to change your habit.

 

As for where to place stops, that depends on your trading strategy and research. It's difficult to do but once you found a consistent spot, taking stops if a lifesaver. I usually place stop the low of 2 bars ago or the last pivot low for long. There are tons of books on explaining on how to place stops. But it must match your strategy and trading style.

Share this post


Link to post
Share on other sites

I have hard stops hardwired in my head at all times. Its come to a point where I dont have to actually place a stop but I am automatically cutting losses super quick. Get into the habit of placing hard stops. Through experience you will be able to be more lenient with stop placement but until you are confident in yourself about taking losses, PUT THAT STOP IN! If it takes you out, great. It just saved your butt from more losses. If it stops you out and moves in your favor, work on entry precision and adjust stop placements. If your entries are well crafted, stops can be tight. If you are depended on confirmation of price action, you are going to take some heat. Determine how much heat you usually take and adjust your stops accordingly. Also, never walk away from an intraday open position. That was your number one mistake.

Share this post


Link to post
Share on other sites

Never walking away from an intra day position is good advice. My first hard lesson which taught me to always have a stop in at all times happened when I used a mental stop. I was long in a position and was going to use a mental stop. I'd drunk around 2 litres of water over the past hour so I was really busitng to go to the loo so I got up and had a marathon slash. By the time I came back to my screen my +8 position was suddenly -11! OMG. Stopped out and then some!

 

Get in the habit of using hard stops!

Share this post


Link to post
Share on other sites

I always use OSO (order sends order) for buys and sell. When my trade goes in my stop and target(s) go with it. Theorectically it's impossible for my stop not to go in if my order is filled. This gives me alot of peace and mind and helps discipline as well. I can always customize the stop and target after it is in place.

Share this post


Link to post
Share on other sites
Guest TRex

I trade with a hard 5 tick stop; however, I have been more liberal in the past few weeks to account for the increase in volitilty.

 

Perhaps just as important as placing (or knowing) your stops in advance is the awareness of the next entry. Too many times, traders get stopped and then freeze or curse or lallygag. Every trade should be made with the knowledge of where the next entry is should you get stopped out, and this may have some impact on your decision to perhaps forgo the stop and take the next entry thereby lowering your cost basis. This is not averaging down! Instead, it is proper trade management and plan execution.

Share this post


Link to post
Share on other sites
I trade with a hard 5 tick stop; however, I have been more liberal in the past few weeks to account for the increase in volitilty.

 

Perhaps just as important as placing (or knowing) your stops in advance is the awareness of the next entry. Too many times, traders get stopped and then freeze or curse or lallygag. Every trade should be made with the knowledge of where the next entry is should you get stopped out, and this may have some impact on your decision to perhaps forgo the stop and take the next entry thereby lowering your cost basis. This is not averaging down! Instead, it is proper trade management and plan execution.

 

rex - you trade with a hard stop, but also forgo the stop? That seems more like a 'soft' stop.

Share this post


Link to post
Share on other sites
Guest TRex
rex - you trade with a hard stop, but also forgo the stop? That seems more like a 'soft' stop.

I thought I was very clear.

 

I trade with a hard stop and depending on the next entry, I may or may not take that stop. For example, if there is another entry exactly at the stopout point--let's say a very high probability setup--I will forgo the stop and and double my position by taking the next trade. My trading plan dictates whether or not I do that AND I'm always aware of the next couple of entries before I take any trade. This is known as trade management.

 

I hope that eliminates your confusion on the matter.

Share this post


Link to post
Share on other sites
I thought I was very clear.

 

I trade with a hard stop and depending on the next entry, I may or may not take that stop. For example, if there is another entry exactly at the stopout point--let's say a very high probability setup--I will forgo the stop and and double my position by taking the next trade. My trading plan dictates whether or not I do that AND I'm always aware of the next couple of entries before I take any trade. This is known as trade management.

 

I hope that eliminates your confusion on the matter.

 

So what you are saying is that you will have a hard stop on your dom, assuming that's a market order, and if another signal is possibly forming, you'll pull that 'hard' stop in case another signal appears? What I am saying is that if your hard stop is at 1500 and price is approaching 1500, it could very well tip 1500 before another signal would appear.

 

Point being that calling something a 'hard' stop when it can be moved or overridden is not a hard stop. That's more of a fluffy, soft stop. ;)

Share this post


Link to post
Share on other sites
Guest TRex
So what you are saying is that you will have a hard stop on your dom, assuming that's a market order, and if another signal is possibly forming, you'll pull that 'hard' stop in case another signal appears? What I am saying is that if your hard stop is at 1500 and price is approaching 1500, it could very well tip 1500 before another signal would appear.

 

Point being that calling something a 'hard' stop when it can be moved or overridden is not a hard stop. That's more of a fluffy, soft stop. ;)

 

That's not what I'm saying at all. In the instance you described, there is no hard stop on the DOM. However, there is an order at the next entry price.

Share this post


Link to post
Share on other sites
That's not what I'm saying at all. In the instance you described, there is no hard stop on the DOM. However, there is an order at the next entry price.

 

OK, so we are back to the discussion of using a hard stop or not. Obviously, by this response, you do not use hard stops. Hard stops mean just that - they are hard and do not change. That's not to say it's wrong, but I was having a hard time understanding how a trader could say 'I use a hard stop' followed up with 'but sometimes that hard stop is moved or not even on the DOM'.

 

That's not a hard stop.

Share this post


Link to post
Share on other sites
Guest TRex

Correct, in this instance, I don't use a hard stop, which is consistent with my first post that you addressed.

 

Aside from this particular situation, I use hard stops. I hope that clears the matter up for you.

Share this post


Link to post
Share on other sites
Correct, in this instance, I don't use a hard stop, which is consistent with my first post that you addressed.

 

Aside from this particular situation, I use hard stops. I hope that clears the matter up for you.

 

Yes, very much so. I think we are pretty clear on how you trade.

Share this post


Link to post
Share on other sites

Join the conversation

You can post now and register later. If you have an account, sign in now to post with your account.
Note: Your post will require moderator approval before it will be visible.

Guest
Reply to this topic...

×   Pasted as rich text.   Paste as plain text instead

  Only 75 emoji are allowed.

×   Your link has been automatically embedded.   Display as a link instead

×   Your previous content has been restored.   Clear editor

×   You cannot paste images directly. Upload or insert images from URL.


  • Topics

  • Posts

    • Be careful who you blame.   I can tell you one thing for sure.   Effective traders don’t blame others when things start to go wrong.   You can hang onto your tendency to play the victim, or the martyr… but if you want to achieve in trading, you have to be prepared to take responsibility.   People assign reasons to outcomes, whether based on internal or external factors.   When traders face losses, it's common for them to blame bad luck, poor advice, or other external factors, rather than reflecting on their own personal attributes like arrogance, fear, or greed.   This is a challenging lesson to grasp in your trading journey, but one that holds immense value.   This is called attribution theory. Taking responsibility for your actions is the key to improving your trading skills. Pause and ask yourself - What role did I play in my financial decisions?   After all, you were the one who listened to that source, and decided to act on that trade based on the rumour. Attributing results solely to external circumstances is what is known as having an ‘external locus of control’.   It's a concept coined by psychologist Julian Rotter in 1954. A trader with an external locus of control might say, "I made a profit because the markets are currently favourable."   Instead, strive to develop an "internal locus of control" and take ownership of your actions.   Assume that all trading results are within your realm of responsibility and actively seek ways to improve your own behaviour.   This is the fastest route to enhancing your trading abilities. A trader with an internal locus of control might proudly state, "My equity curve is rising because I am a disciplined trader who faithfully follows my trading plan." Author: Louise Bedford Source: https://www.tradinggame.com.au/
    • SELF IMPROVEMENT.   The whole self-help industry began when Dale Carnegie published How to Win Friends and Influence People in 1936. Then came other classics like Think And Grow Rich by Napoleon Hill, Awaken the Giant Within by Tony Robbins toward the end of the century.   Today, teaching people how to improve themselves is a business. A pure ruthless business where some people sell utter bullshit.   There are broke Instagrammers and YouTubers with literally no solid background teaching men how to be attractive to women, how to begin a start-up, how to become successful — most of these guys speaking nothing more than hollow motivational words and cliche stuff. They waste your time. Some of these people who present themselves as hugely successful also give talks and write books.   There are so many books on financial advice, self-improvement, love, etc and some people actually try to read them. They are a waste of time, mostly.   When you start reading a dozen books on finance you realize that they all say the same stuff.   You are not going to live forever in the learning phase. Don't procrastinate by reading bull-shit or the same good knowledge in 10 books. What we ought to do is choose wisely.   Yes. A good book can change your life, given you do what it asks you to do.   All the books I have named up to now are worthy of reading. Tim Ferriss, Simon Sinek, Robert Greene — these guys are worthy of reading. These guys teach what others don't. Their books are unique and actually, come from relevant and successful people.   When Richard Branson writes a book about entrepreneurship, go read it. Every line in that book is said by one of the greatest entrepreneurs of our time.   When a Chinese millionaire( he claims to be) Youtuber who releases a video titled “Why reading books keeps you broke” and a year later another one “My recommendation of books for grand success” you should be wise to tell him to jump from Victoria Falls.   These self-improvement gurus sell you delusions.   They say they have those little tricks that only they know that if you use, everything in your life will be perfect. Those little tricks. We are just “making of a to-do-list before sleeping” away from becoming the next Bill Gates.   There are no little tricks.   There is no success-mantra.   Self-improvement is a trap for 99% of the people. You can't do that unless you are very, very strong.   If you are looking for easy ways, you will only keep wasting your time forgetting that your time on this planet is limited, as alive humans that is.   Also, I feel that people who claim to read like a book a day or promote it are idiots. You retain nothing. When you do read a good book, you read slow, sometimes a whole paragraph, again and again, dwelling on it, trying to internalize its knowledge. You try to understand. You think. It takes time.   It's better to read a good book 10 times than 1000 stupid ones.   So be choosy. Read from the guys who actually know something, not some wannabe ‘influencers’.   Edit: Think And Grow Rich was written as a result of a project assigned to Napoleon Hill by Andrew Carnegie(the 2nd richest man in recent history). He was asked to study the most successful people on the planet and document which characteristics made them great. He did extensive work in studying hundreds of the most successful people of that time. The result was that little book.   Nowadays some people just study Instagram algorithms and think of themselves as a Dale Carnegie or Anthony Robbins. By Nupur Nishant, Quora Profits from free accurate cryptos signals: https://www.predictmag.com/    
    • there is no avoiding loses to be honest, its just how the market is. you win some and hopefully more, but u do lose some. 
    • $CSCO Cisco Systems stock, nice top of range breakout, from Stocks to Watch at https://stockconsultant.com/?CSCOSEPN Septerna stock watch for a bottom breakout, good upside price gap
    • $CSCO Cisco Systems stock, nice top of range breakout, from Stocks to Watch at https://stockconsultant.com/?CSCOSEPN Septerna stock watch for a bottom breakout, good upside price gap
×
×
  • Create New...

Important Information

By using this site, you agree to our Terms of Use.