Good post on "STOPLOSS HUNTERS"...... by loss_lover
Stop-loss hunt is a paradox in reality. Do we really need to know why we lose a trade? It's just the opposite of our expected outcome. We can either be right or wrong. We have no control over the outcome. Stop-loss hit simply shows that we were wrong, look for next trade. Move on......
It's more like appearing a school class-test with every single trade. Some questions you get right, some wrong. Back then in school, you didn't use to cry foul on teacher for being wrong. You were just wrong, so no mark scored, simple! Why now?
It's our money-related emotional foreplay that converts a small potential loss into a big one. Otherwise, if we stick to our rule the outcome after several hundred trades will approximate to the win-loss% of our strategy, isn't it? We consistently make a mistake to observe every trade individually instead of analyzing a certain set of trades. Blame huge leverage that you take, not the Trade or the Big Boys who are providing liquidity for you and me to swim!
After three years of full-time all sorts of trading, one piece of suggestion that I can give you is that we have no right to "judge" a Trade, rather, we need to "execute" the Plan no matter what......
Coming to Stop-Loss placement, I maintain a fixed x% on my capital (without leverage) that I can afford to loose several times in a row which will allow me to survive in the market even after being hit several times. Believe me! It is the most toughest thing to do in Trading with due-diligence and discipline. Now, in-order to escape the typical scenario of markets hitting our stop and run in our original direction, I consider Volatility and ATR for Stops within my "Affordability". Search for Cynthia Kase's work for better understanding.
Stop-loss hunt is a paradox in reality. Do we really need to know why we lose a trade? It's just the opposite of our expected outcome. We can either be right or wrong. We have no control over the outcome. Stop-loss hit simply shows that we were wrong, look for next trade. Move on......
It's more like appearing a school class-test with every single trade. Some questions you get right, some wrong. Back then in school, you didn't use to cry foul on teacher for being wrong. You were just wrong, so no mark scored, simple! Why now?
It's our money-related emotional foreplay that converts a small potential loss into a big one. Otherwise, if we stick to our rule the outcome after several hundred trades will approximate to the win-loss% of our strategy, isn't it? We consistently make a mistake to observe every trade individually instead of analyzing a certain set of trades. Blame huge leverage that you take, not the Trade or the Big Boys who are providing liquidity for you and me to swim!
After three years of full-time all sorts of trading, one piece of suggestion that I can give you is that we have no right to "judge" a Trade, rather, we need to "execute" the Plan no matter what......
Coming to Stop-Loss placement, I maintain a fixed x% on my capital (without leverage) that I can afford to loose several times in a row which will allow me to survive in the market even after being hit several times. Believe me! It is the most toughest thing to do in Trading with due-diligence and discipline. Now, in-order to escape the typical scenario of markets hitting our stop and run in our original direction, I consider Volatility and ATR for Stops within my "Affordability". Search for Cynthia Kase's work for better understanding.
