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I trade on a short term swing timeframe. I'm convinced that on a DAILY
basis, the floor traders have control, but can only hold it for so long. A
great example of running stops is in the beans yesterday (Wednesday). They
took out the low stops, and immediately took the market to the high end of
the congestion, all done very quickly before settling down within the
range again. They effectively have given themselves more room to play both
sides as the range was getting smaller and smaller. Have a
look...Sometimes I trade with physical stops, sometimes mental. Yesterday
was mental or else I would have been taken out.....
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> From: cb <cpbow@xxxxxxxxxxxxx>
> To: RealTraders Discussion Group <realtraders@xxxxxxxxxxxxxx>
> Subject: Re: Stops
> Date: Friday, May 14, 1999 9:57 AM
>
> gary bodnar wrote:
> >
> > Hi all
> >
> > My gambler friend once wrote something about the stops..."It is like
leaving
> > your wallet on a street in New York City. You can be sure it will be
gone."
> > Prefer to use mental stops...
> >
> > Gary
> >
> >
>
> Seems to me that a mental stop only makes sense if you intend to
> exercise a significant amount of discretion at the time it is hit, or
> need to "work" the order because of large size. Otherwise it makes no
> sense (to me) to not have the stop in the market. The market is going
> to go up and down whether or not your order is in there. You might as
> well be protected. The assumption I make is that the locals try to
> guess what the market is going to do and part of that is guessing where
> the stops are so they can get in ahead of time. I assume they don't
> *know* the content of the floor brokers orders. Am I wrong??
>
> Are the locals doing the same things we are (a mix of trend
> following/anticipating, support/resistance, breakout trading), just on a
> shorter time scale? Or are they thiefs taking your money. With the
> arguable exception of the true hedgers we're *all* trying to take money
> from the other guy/gal. How you view the locals probably just depends
> on how bitter you want to be.
>
> As a (not yet successful) moderately longterm trader, if I'm doing
> futures I try to keep my stops out of the daily "noise" of the market
> and even allow for some retracement. So I'm not impacted as much by the
> intraday movement, or at least not as often. There are definately
> exceptions, but a lot of times I am stopped out the trend has in fact
> reversed. I may wish I had gotten out sooner, or not at the lower end
> of the daily range that day, but many times the fact I'm out is good.
> (Currently to due to very small size I'm just buying options - here i do
> use a mental stop in the futures to tell me when to give back the option
> since stops in options don't work very well.)
>
>
> Conrad Bowers
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