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Thnk superfragilist
Noted and accepted.
Divya
superfragalist <no_reply@xxxxxxxxxxxxxxx> 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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