No set stops

[Truville]

I think yesterday’s trading shows why it is important to remain flexible in your trading, and sometimes not have set, hard stops.

About 20 minutes before the UK explosions, I went short Euro, thinking to make a quick 15 pips. Suddenly, negative 10, negative 20, negative 40! What’s going on here?

Now, normally, my stop would have been triggered, and I’d take the loss. But I didn’t this time. Because what I saw was nothing more than panic selling. I absolutely knew that the Euro would turn around, and it did.

This isn’t cable we are talking about. If I was long cable, I would have taken the loss and been glad to only lose what I did. But since Euro really was only peripherally involved, I felt comfortable in letting it ride.

Euro was up to about –80 at one point, then, as I expected, dropped down, down to make my target after all.

In fact, I’ll bet a lot of systems had their stops hit, triggered a buy and had those stops hit too.

I think it is times like these that separate the traders from the system. After all, what system could have predicted that? But a good trader can evaluate the system, and act accordingly.

I think that is what we are all striving for, really. I’m not saying that one should always move their stop. Of course not. But to allow yourself that flexibility, in extraordinary circumstances, I think that is what differentiates good traders from great.

[hoene003]

Originally Posted by Truville

I think yesterday’s trading shows why it is important to remain flexible in your trading, and sometimes not have set, hard stops.

About 20 minutes before the UK explosions, I went short Euro, thinking to make a quick 15 pips. Suddenly, negative 10, negative 20, negative 40! What’s going on here?

Now, normally, my stop would have been triggered, and I’d take the loss. But I didn’t this time. Because what I saw was nothing more than panic selling. I absolutely knew that the Euro would turn around, and it did.

This isn’t cable we are talking about. If I was long cable, I would have taken the loss and been glad to only lose what I did. But since Euro really was only peripherally involved, I felt comfortable in letting it ride.

Euro was up to about –80 at one point, then, as I expected, dropped down, down to make my target after all.

In fact, I’ll bet a lot of systems had their stops hit, triggered a buy and had those stops hit too.

I think it is times like these that separate the traders from the system. After all, what system could have predicted that? But a good trader can evaluate the system, and act accordingly.

I think that is what we are all striving for, really. I’m not saying that one should always move their stop. Of course not. But to allow yourself that flexibility, in extraordinary circumstances, I think that is what differentiates good traders from great.

I would cut loss and try take the ride down after the storm is over. I would not go for 15 pips with a draw-down of 80+ even if I felt certain I had to come down. Because nothing is certain in this jungle. Just my oppinion.

[nhrycun]

That would be scarey, not having a stop. What I did... I got stopped out in the move, when the momentum started to turn down I then sold the Eur/Usd again and made back what I had lost as well made a boat load more. I could never let that move go with out a stop. I trade to much capital in one trade to let a move that big go against me. The only way to keep moves like that from triggering stops would be to trade less capital and in that situation would have been place the SL above the high at 1.2118 for June 30. Then you would also be a long term trader, which I am not.

In short, I would suggest never trading with out a plan. Which means a projected take profit and a projected stoploss. If a ship with out a captian can not get out of the harbour, how is a trader going to make money with out a plan.

[elmagd2000]

Yes, risking 80 pip for 15 pip target is against money management rules. 2 losses would breakeven or wipe out 10 wins' profit.

Hani

[Croesus]

Originally Posted by Truville

Because what I saw was nothing more than panic selling. I absolutely knew that the Euro would turn around, and it did.

You was lucky because it was only panic selling!!! This is the point dear Truville.

However I agree with you about the flexibility thing.

[PTB]

Each trader has their own set of rules. What works for one may not work for another. I know of a trader who actually cheers when it goes against him because he knows he will be entering again at a better price. His set of rules work for him because he is very very confident of his trades. His daily goal is $20,000-$25,000. His best day was over $130,000 on a spike up while he wasn't watching his computer. Naturally he now has deep pockets and is able to trade this way.

Us little guys need to grow with rules that fit/work with us. Truville has been around longer than most and is obviously able to trade by his own rules.

[Truville]

Originally Posted by PTB

Us little guys need to grow with rules that fit/work with us.

Perfectly put! Absolutely spot on. Exactly my point, concisely said.

[demag]

I also had three trades running at that time. Luckily none of them was GPB. I think if it was I would have been stopped out and took a loss. I did have fairly long stops on all my trades and eventually came out for £100 profit.