Stop-Loss strategies

[shaunm]

I was wondering how people set their stop-loss strategies?
I have been doing mine around 10% or less and have been getting sold. I guess in the recent market conditions this is now more likely anyway.
Your thoughts are welcome.

 

[sutti]

I usually set mine at around 20% for short term investments.

 

[nizar]

I was wondering how people set their stop-loss strategies?
I have been doing mine around 10% or less and have been getting sold. I guess in the recent market conditions this is now more likely anyway.
Your thoughts are welcome.

I set my initial stop at 15%.
But my system works equally well without an initial stop, its only there for position sizing purposes.

 

[tech/a]

I set my initial stop at 15%.
But my system works equally well without an initial stop, its only there for position sizing purposes.

Your kidding arent you?

I usually set mine at around 20% for short term investments.

So you need a 20% rise to have a 1:1 R/R
Your kidding as well surely!

I have been doing mine around 10% or less and have been getting sold.

Whats your R/R on your methodology with your 10% stop?
Whats your average trade length?
Whats you longest string of losses?
How do you position size ? Fixed fractional----guess?
Whats your win loss ratio?
Whats your average win to average loss?
Whats your average time in a trade?
What makes you think that failure is due ONLY to the position of your stop?

 

[professor_frink]

I was wondering how people set their stop-loss strategies?
I have been doing mine around 10% or less and have been getting sold. I guess in the recent market conditions this is now more likely anyway.
Your thoughts are welcome.

Generally based around a pivot low point for longs and a recent pivot high for shorts. For trading stock, then base position size off the difference between entry and stop level. For my futures trading, amount of contracts traded is more based on trading 1 contract per $xx in capital to limit the overall leverage I use(can vary quite a bit between instruments based on size of the contract, timeframe involved and the general volatility of the product traded).

I'm not really a huge fan of using an arbitrary % move against the position- it has the potential to be a little excessive in low volatility environments, and can also be too tight when vols pick up, depending on the figure used, and style of trading employed. Though I'm sure there are quite a few people that would disagree with me here.

 

[rowes]

Generally based around a pivot low point for longs and a recent pivot high for shorts.

I'm not really a huge fan of using an arbitrary % move against the position- it has the potential to be a little excessive in low volatility environments, and can also be too tight when vols pick up, depending on the figure used, and style of trading employed. Though I'm sure there are quite a few people that would disagree with me here.

I agree.

I use candlesticks which have there own way of determining a stop position as opposed to a percentage. For me they have worked extremely well.

 

[wayneL]

Generally based around a pivot low point for longs and a recent pivot high for shorts. For trading stock, then base position size off the difference between entry and stop level. For my futures trading, amount of contracts traded is more based on trading 1 contract per $xx in capital to limit the overall leverage I use(can vary quite a bit between instruments based on size of the contract, timeframe involved and the general volatility of the product traded).

I'm not really a huge fan of using an arbitrary % move against the position- it has the potential to be a little excessive in low volatility environments, and can also be too tight when vols pick up, depending on the figure used, and style of trading employed. Though I'm sure there are quite a few people that would disagree with me here.

Not I.

This is the most logical technical method IMO as well.

 

[Timmy]

A stop loss is tough love.

Setting and managing the stop loss ... can of worms ...

FWIW I use the stop loss as a worst-case scenario - what this means is when I am in a trade I do not wait for the stop loss to be hit to prove to me that I was wrong on that trade. Instead I need the price to move in my favour to prove to me that I am right on the trade. If the price is moving to show me I am in the right position then my stop is closed up towards breakeven, and then to breakeven, ASAP (if not sooner...).

If the price does not move in my favour quickly then I will not hold the trade, I am out and the stop is cancelled (don't forget to do this). How quick does the trade need to move in favour? Well, that's one can of worms, I don't have a definitive answer, its going to depend on your own trading experiences/plan.

 

[wayneL]

....then I will not hold the trade, I am out and the stop is cancelled (don't forget to do this).

How many of us have learned this the hard way? LOL

 

[professor_frink]

How many of us have learned this the hard way? LOL

 

[tech/a]

While I dare not disagree -------.
The question then begs which pivots.
Major pivots
Moinor Pivots.
Intermediatary.
Any pivot.

I dont know how anyone can be definative with a stop---and there are 100s without reference to the trading methodology adopted by the trader.
One size fits all doesnt cut it!

In my not so humble opinion.

 

[MS+Tradesim]

I use a multiple of the ATR of the median price. A larger multiple for long-term, a smaller multiple for short-term.

tech/a wrote:

I dont know how anyone can be definative with a stop---and there are 100s without reference to the trading methodology adopted by the trader. One size fits all doesnt cut it!

Ain't that the truth!

(bad sp. intended)

 

[Timmy]

While I dare not disagree -------.
The question then begs which pivots.
Major pivots
Moinor Pivots.
Intermediatary.
Any pivot.

Which indeed? I don' t think anyone would disagree.

there are 100s without reference to the trading methodology adopted by the trader.
One size fits all doesnt cut it!

I don' t think anyone would disagree.

In my not so humble opinion.

I don' t think anyone would disagree.

 

[Timmy]

What 'pivot' to use as a stop?

Using VSA principles/Wyckoff principles, a sensible pivot to use as an initial stop loss price (on a long) could be below the low of a test after a sign of strength (given the background supports taking a long position).

 

[wayneL]

While I dare not disagree -------.
The question then begs which pivots.
Major pivots
Moinor Pivots.
Intermediatary.
Any pivot.

I dont know how anyone can be definative with a stop---and there are 100s without reference to the trading methodology adopted by the trader.
One size fits all doesnt cut it!

In my not so humble opinion.

If you know what sort of trend it is you're trading (a swing is still a trend) and exit the strategy, it's kinda obvious in 80-90% of cases. The remainder is a case of eanie meanie minee moe (with a dose of money management thrown in, just for sh!ts and giggles). </flippant>

 

[kingie_d]

I agree with Wayne and Fink and the other people who use the pivots as their initial stop. As to the question of which pivot point I think that depends on your time frame (here's your cape Captain Obvious).
My question to everyone is: What do you use as a trailing stop? Do you wait for the next pivot (and maybe pyramid into a winning trade?...) then use that as your stop? What about indicators? Moving average crossovers? ATR? Countback line?
I've been using the pivot as the initial stop then going to 2 x ATR when it is in my favour then tightening it even further to 1 x ATR when the price closes a couple of days in a row outside the ATR Bands? But thats me and I'm more interested in short to med term trades than long term stuff...

 

[Kauri]

What's a stop??? Is that where you average down
Cheers
..........kauri

 

[ecfutures]

I would rather set my cut-loss point a tick lower at recent low or recent high once i entry market (either long /short). After the price soar to some certain level then only we find out the trailing stop. Once trailing stop triggered, turn short again. Just holding position all the time & success always by your side.

 

[happytrader]

Hi Shaunm

I am a short term derivatives or leveraged trader and the very best advice I can offer you is this, 'as soon as it goes the wrong way get out' The wrong way is when a share losses 3% of its value or the option loses 15 to 20% of its value. This is why you really need to be extremely specific with entries and timeframe.

This is much easier to do if you never allow yourself to entertain a 'victim' mindset.

Cheers
Happytrader

 

[maxx122]

My Stop Loss Strategy is to never risk more than 5% of your capital in a trade.