Effects of not keeping a Stop Loss

[oxusmorouz]

without taking away anything from your brilliant work, sometimes the simple things may be sufficient. just like someone using garch to look out for volatility in volatility and someone just using ATR to do the same for the instrument.

Welcome back, BAV. How do you mean by simple things?

 

[CreditViolet]

Hello CreditViolet

Do you take Apprentice?

If yes what would be the qualifications required?

I am just starting out, and planning to take up trading as a profession, if you get some time please leave a message on the Journal I have started here at traderji.

Thanks
nb

Link

I dont know about apprentices but I will be glad to provide any help I can.

Just one thing, people telll me that I ask more questions than I give answers though

 

[beginner_av]

Problem is to get the very busy CV to ask questions! you would be very lucky if he asks questions!

 

[THETRADER]

Hi,

I do believe that SL is must for any Day Trader. I have never traded without SL. The agonising part is, half of my LossTrades would have been Profitable but for SL. I have tried with deeper SL ( say 2 - 3 %) without much success. Never had guts to trade without SL. Still can not stop from grudgingly admire, Gutsy Traders.

Cheers
PAKatil

Why not try a different strategy for SL? Maybe a technical stop, instead of 2-3%?

 

[sampumu]

How is this strategy of technical stop? can u pl explain?

 

[THETRADER]

Use technical analysis (whatever strategy you follow) for a stop. The idea being an arbitrary fixed percentage may not be applicable to all scrips and all times (volatility changes). In addition, money management can also be used.

 

[666]

For an effective stop-loss, one should first calculate volatility of stock. If a stock is very volatile, then a standard 1-2% stop might not work. Then reduce position and then keep a reasonable stop to ensure that your position pays off.
If a stock is less volatile then one can keep a strict stop-loss.

 

[Linus]

For an effective stop-loss, one should first calculate volatility of stock. If a stock is very volatile, then a standard 1-2% stop might not work. Then reduce position and then keep a reasonable stop to ensure that your position pays off.
If a stock is less volatile then one can keep a strict stop-loss.

Hi, Please give us some examples.

The data for Reliance :

Beta 1.08, r- squared ( co-efficient of determination) 0.71, and average daily volatility 2.00

Given this, how can one put stops on Reliance on intraday trades ?

ss

 

[CreditViolet]

Another newbie thread with lots of newbie nuggets.It is hard to find a country gentleman who wants to distinguish himself from other hare-catchers without a Elder on his fireplace

 

[spattavayal]

some simple rules for stop loss

1. After buying a stock keep a stop loss of 5-7% for the day. If the stock drops more than 7% , you must assume that something is wrong with the stock.
If 5% is too much for you, you can place a stop a immediate support.If the stock has support at 100, keep a SL < 100 (say 99.50) as the stock might test the support for a breif period and bounce back.
2. If the stock move above your buy say 5-10% , you can place SL just above 3% or so , so that you can get some profit if the stock reverses.
3. If the stock moves >20% , you can place +10% SL or take some profit.

4.Never modify SL if the price falls below 7% from your buy. The purpose of SL is defeated.
5.If you are away from terminal for long time , it is always better to keep SL . SL can protect you from system crash, unavailibilty. It is my experience

6.Never work without SL in options ! For options the tolerance may be 15-20% . You need to count the spread. Also the difference between trigger and limit must be more that spread.

7.Beware, first and last 30 are usually when SL gets triggered. Try to place SL after 10.30 and remove @3.00 if you are in comfort zone !

Experts please correct me if something is wrong