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Go to a shorter time frame to find a viable stop. Ira.
Brian Keith Voiles wrote:
> Since every broker in America tells their client to place a stop above
> previous resistance or below previous support, I've been struggling with
> that "following the crowd" mentality. I've been using "mental-written"
> stops fairly effectively. But, day before yesterday I found myself up 20
> points and wanting more in the S&P 500. Rather than taking my profits (or
> some of my profits) and running, I decided to "go for" more. Long story
> short, the whole trend changed and before I knew it I was out 39.9
> points. I didn't pull the plug on the trade while it was still profitable
> (although that's really hard to do because I was thinking "Well I could've
> had 20 points, now it's down to 16, 14, 12, 8, etc) because I felt they
> were taking the market up so they could take it down some more. Anyway, if
> I had a stop placed I would have been stopped out in the first place --
> which ultimately would have been better than what I did lose, but then
> again, I wouldn't have had the "opportunity" to make 20+ points (hand I
> chosen to take my profits when I should have).
>
> I'm looking for advice:
>
> Where do you S&P Traders place your stops? Do you base it soley on a
> percentage of your trading capitol?... equity? If so, what percentage?....
> I've heard 3 and 5% -- but if you're trading 2 or 3 contracts (like I do --
> I built my account from $10,000 up to $50,000 in July -- yipee!) at 5% I'd
> have to place a 3.3 point stop (Risking $833.33 on the trade). In the S&P
> this is a pretty tight stop based on my limited experience of one-year.
>
> Placing my stop above previous resistance or below previous support sounds
> absolutely crazy to me -- all the floor traders know where the orders are,
> and they DO run the stops.
>
> Realizing that ANYTHING CAN HAPPEN in the market, it makes sense to
> actually have stop orders in the market and working.... but I'm struggling
> with where. George Angell is a brilliant S&P trader and on his "Sniper
> Trading" course and his "Precision" book he says he never puts a stop order
> in at the desk, but adhere's to his own stops just the same.
>
> Anyway.... all opinions and advice are welcome. Any books I should read,
> people to talk to, advice to pay for? Help!
>
> Warmly,
> Brian Keith Voiles
>
> PS> I love this list!
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