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Larry's stops are worked on the basis of being right more times than you
are wrong. He has to take profit quickly eg on first profit to keep his
Expectation positive. He also wants to know that he is wrong really when
he is stopped out. This contrasts with the Turtles and other trend
followers who only want to lose a little on any one trade and ride home a
few big winners. It comes down to your own psychology and stomach lining
as to what you can handle. You need to realise what your system/method
will do on each trade. Whose method is best in the short run depends on the
nature of the markets at the time. Sometimes Short term rules sometimes
Long term works. Love or hate it most methods have losing streaks. The
stops help us live to trade again.
David Hunt
http://adest.com.au
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| From: John Nowak <joachim@xxxxxxxxxxx>
| To: Peter Timaratz <timaratz@xxxxxxxxx>
| Cc: RealTraders Discussion Group <realtraders@xxxxxxxxxxxxxx>
| Subject: Re: Larry Williams
| Date: Wednesday, June 03, 1998 4:14 AM
|
| Ok....now that we've established that we don't like Larry's and Bill's
| stops.......what do you find works better?? As we are on the topic
| ...let's review Larry's and Bill's ideas ....let's see where they fail.
| Reply privately if you wish.
|
|
|
| John
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|
| Peter Timaratz wrote:
|
| > >Bill Williams also talked about "trading the market not
| > your wallet" in connection with stop
| > >placement.
| >
| > I was a student of Bill years ago. Back then I had a fairly
| > small account and I told him I thought it was too risky for
| > me to trade bonds with this size of account. He said I
| > should trade the market and not my wallet. I agree that
| > stops should be calculated based on market considerations.
| > But if a stop entails too much risk relative to your account
| > then you shouldn't take the trade. It's a simple money
| > management principle, but Bill didn't agree with it.
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