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In the T-Bonds the place for stops is behind resistance/support and that's
it - but you need to assess the strength of the line concerned. If that
turns out to be too far away for the trade to have an acceptable r/r/r,
then you don't take the trade. Whether those stops are in or out of the
market is, of course, a different matter and a separate subject, which
would include how precisely they are activated. But arbitrary places like
range values, percentages of accounts, etc which are commonly used, usually
end in tears.
Also, the way stops are placed must depend on the nature and character of
the market. The bonds, which move with a measured tread, compared with the
S&P or the beans in season, for example, will be very different. But the
common factor is that it must be the market, rather than budgetary
consideration which must count first.
Those who trade a multitude of markets must have a different approach to
those who specialize in one. The bonds has some definite characteristics,
which I suspect are not seen in some other markets. And if specializing in
one market makes you open to being called a 'know all' then I am all for
it. If you can aspire to know as much as you can about one market, you
might do better than ducking and diving in several. Very often, those who
constantly shift their hunting ground end up with less game than those who
get to know their patch thoroughly. That is certainly my experience,
anyway.
Best of...
Bill Eykyn
www.t-bondtrader.com
-----Original Message-----
From: Peter M. Beckwith <capstone@xxxxxxxxxxxxxxx>
To: RealTraders Discussion Group <realtraders@xxxxxxxxxxxxxx>
Date: Wednesday, May 19, 1999 3:27 pm
Subject: Re: Position Sizing
Although it is common practice for many individuals to size up a trade and
then set their stop loss to a fixed percentage, I cannot understand for the
life of me how 3x ATR would be a good idea. Is this for a long term
position trade. If so, wouldn't the price action tell you to exit the
trade far in advance of the 3x ATR. That would correlate to a stop
somewhere in the vicinity of 1265. Obviously if the sp broke 1300 I would
be concerned as a long term position trader.
Pete
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