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Super,
Whew! By the way, regarding the stops based on support and
resistance, I meant:
POSITION SIZE = (MAXIMUM AFFORDABLE LOSS)/STOP
where the position size scales with the stop. And the maximum loss is
fixed (say 1% of the capital account). The only case where things
might go wrong is when the trade is already executed and the stop
needs to be adjusted and it begins to widen. Please let me know if
you see a flaw here.
And please send me the address for that night school.
--- In equismetastock@xxxxxxxxxxxxxxx, superfragalist <no_reply@xxxx>
wrote:
>
>
> I know this answer is not what you want to hear, but rather than
> reading a bunch of my posts on this and other sites, the better
thing
> to do is to start reading some of the system's development books
that
> will really answer your questions. Setup a reading schedule,
consider
> it your graduate education in trading. That will benefit you a lot
> more in the long run. You will get a bigger return from your book
> investment than you will get from your trading.
>
> For example, rvalue just brought up the issue that stops reduce
> profit. There's no quesiton that in most cases that's true, but
it's
> not true with all stops and in all cases. Different types of stops
> are used in different circumstances. You can learn about this from
> guys like Thomas Stridsman and others.
>
> I have two stops on my trading screens, one is based on Chandelier
> exits and one on adaptive ATR stops. The Chandelier stop is tighter
> and adaptive ATR is somewhat more relaxed. Which stop I take
depends
> on the market conditions at the time. You can't program that into a
> systems tester. However, when I use the adaptive ATR stop in the
> tester the profitability of the system goes up so why wouldn't I
> follow it exclusively? Market conditions!
>
> I can't possibly explain enough about using stops in a couple of
> short posts to teach anyone anything that will save their butts. I
> learned the adaptive coding from Perry Kaufman and the Chandelier
> methods from LeBeau. It took awhile to get it right, and it didn't
> come from a post or two. Both methods use the ATR but there is a
huge
> difference in how they use it.
>
> Andy asked the question about support and resistance for setting
> stops. You can do that, some people advocate it, but it will cause
a
> lot of traders to go broke because they are not stopping out when
> they hit the maximum loss they can afford for the size of their
> capital account. (preservation of capital is more important than
> profit) In addition, you can't get two people to agree on where
> support and resistance is at on a chart.
>
> Rvalue says stops reduce profit--as I said in most cases they do,
but
> they keep you in the game. Using a very, very large stop is called
> buy and hold.
>
> Boards allow many, many people to express their opinions.
> Unfortunately most of the opinions are not backed up by any
education
> or substantive facts, so they are of little value, and at the worst
a
> lot of them are down right wrong. So I wouldn't come to a chat
board
> to learn anything. I would go to people who actually have to depend
> on what they do to make a living. I don't mean the people who want
to
> sell you their trading systems and seminars. I'm talking about
people
> like Kaufman and Stridsman who develop systems for a living and
share
> they knowledge of what works and what doesn't in their books.
>
> I often hear people say that they can't afford to read the books,
or
> they don't like reading, etc. Well, if you lose $20,000 trading,
how
> many books could you have afforded.
>
> You can get your MBA from Harvard night school for less than
$40,000
> (night school doesn't have the entrance requirements like the day
> program so that's not an excuse, and the diploma doesn't say night
> school). How many people would do that as compared to those that
have
> lost more than that amount trying to trade. It's ridiculous how
high
> the cost of ignorance is.
>
> When I was first starting in the investment business, I had a
friend
> who had been in the business for many years and was very
successful.
> He told me that if you asked 100 people if they wanted to be rich,
> 99% of them would say yes, but only 1% would be willing to do what
it
> takes. He was dead ass right!
>
>
>
>
> --- In equismetastock@xxxxxxxxxxxxxxx, Divya Singh
> <divyasingh01@xxxx> wrote:
> > Superfragalist,
> >
> > I too find your posts extremely intresting and balanced backed by
a
> lot of experience (so it seems) - What are the other grps you post
> in? would like to read them ..............
> >
> > Divya
> >
> > superfragalist <no_reply@xxxxxxxxxxxxxxx> wrote:
> >
> >
> > Thank you for the kind remarks. I assume you're basing your
> comments
> > on a compilation of postings on all boards, not just this one. I
> > don't post much on here. However, it's far too much for a lot of
> the
> > members.
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