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Hi Pompatis,
I hope you don't mind but I posted the answer to
your question to the list as I had a few along similar
lines.
I want to make clear I always place a stop on my
position once I initiate a trade no matter how unlikely
it is to get hit. I never know what the mkt may do.
e.g. the mean range for a 5 min bar on the USD/JPY
is 26 ticks. In one 5 min period on June 16th, the mkt
dropped 132 tics in 5 min!
I place the stop loss order at the same time as I place
the entry - I don't wait for a fill to do that:-
"If I am buying below the mkt, I must get a fill on my entry
before I can get stopped out; if I am buying above the mkt,
I place an "if done" order - I am telling my bank to place the
stop loss only when I am filled on my order. Reverse for shorts".
What I meant to convey is not that I don't use stops, but that
when I am trading well, I exit well before my stops are hit. My
stops are my insurance against the unexpected event; on the
expected events I exit when the mkt is playing a different tune.
To answer your question - if the mkt is too close to my stop, then
I let my stop take me out. The last thing I want is to be in a position
inadvertently because I got out at mkt and was too late to cancel
the stop. Otherwise, the answer to your question is "yes".
regards
ray
R Barros
101/25 Market Street
Sydney NSW 2000
Australia
Voice: 61 2 92673470
Fax: 61 2 92673478
E-Mail: rbarros@xxxxxxxxxxxxxxxxxx
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> From: POMPATIS@xxxxxxx
> To: rbarros@xxxxxxxxxxxxxxxxxx
> Subject: Re: Help understand statement.
> Date: Friday, August 07, 1998 6:34 AM
>
> Dear Ray:
>
> In a message dated 98-08-06 01:41:05 EDT, you write:
>
> << The POP said
> it much better - when you put on a trade assume a trade is
> wrong and unless the market proves the trade right, you exit.
>
> Most traders take the opposite view - place the stop and let the mkt
> prove the trade wrong.
>
> Does early exit mean the market would not have stopped me out and have
> gone my way? Yes. Sometimes I do climb back on board though not at
> so advantageous a price as the original entry; sometimes I just miss the
> move. The trade off to missing a move is you keep most losses very,
> very small. >>
>
> In regards to the above notion and day trading:
>
> Do you think it best to still place an "in the market stop loss" as soon
>as the entry order is filled and use tape reading and a quick "cancel the
>stop and get out at market" when and if the market fails to confirm the
>position.
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