Where's The Stop, Dude?

Contest:

I am back up to +30% for the contest.

My friend Kurt is in 1st Place now.  He is a great and CALM trader.  Everyone better watch out!
http://www.worldcupadvisor.com/worldcupchampionships/default_nwcc2.aspx

******************************************


One positive trading day all week. Four losing days.  Yuck.  But there is always next week...


You still might be puzzled by the large loss I had earlier this week from a 1 lot. Over $3,000.

You might be wondering "Hey dumba**, why didn't you have a stop?"

Good question!


Here is an answer:

It is always good to have a stop loss point.  For most people, having a firm stop loss order in the market is the only way to go.  "Mental" stops - the ones where you tell yourself you'll get out when price hits the stop point - work only for very disciplined traders.

I use hard stop losses quite a bit.  Here is a screenshot of some of the ones I have going right now (these are not in the contest acct).

So, that is Option A:  Have a firm stop loss order entered at all times. (most people should stick to this)

I also use some other types of stops:

Option B:  Exit next bar next bar Open if loss at close exceeds stop level (mental stop)
Option C:  Exit next bar next bar Close if loss at current bar close exceeds stop level (mental stop)
Option D:  No stop

For the contest, I am using Option C.  With the particular way I am trading, I found that waiting a while (until the next close) after my stop was "hit" on average made the loss smaller.


So, I do have a "stop loss" point, but it is not typical.  It leaves me exposed to market action like I had this week.

C'est la vie.