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There is another dimension to stops other than just money management. It
helps you to qualify trades. This is why I like double tops. Placing a stop
above the nearby pivot does not require a wide stop. Of course you may have
to wait for awhile for the setup. There are certain human tendencies, such
as the desire to have a hand in every pot in poker, that must be overcome
George
-----Original Message-----
From: David Hunt <adest@xxxxxxxxxx>
To: John Nowak <joachim@xxxxxxxxxxx>; Peter Timaratz <timaratz@xxxxxxxxx>
Cc: RealTraders Discussion Group <realtraders@xxxxxxxxxxxxxx>
Date: Thursday, June 04, 1998 6:29 AM
Subject: Re: Larry Williams
>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
>
>
>----------
>| 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
>|
>|
>|
>|
>| 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.
>|
>|
>|
>
|