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You have an amazingly uncanny ability to state the
obvious.
Why do you continue and insist upon embarrassing
yourself in public?
Honestly now, you cannot possibly be that
stupid.
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style="PADDING-RIGHT: 0px; PADDING-LEFT: 5px; MARGIN-LEFT: 5px; BORDER-LEFT: #000000 2px solid; MARGIN-RIGHT: 0px">
----- Original Message -----
<DIV
style="BACKGROUND: #e4e4e4; FONT: 10pt arial; font-color: black">From:
ric
ingram
To: <A title=realtraders@xxxxxxxxxxxxxxx
href="mailto:realtraders@xxxxxxxxxxxxxxx";>realtraders@xxxxxxxxxxxxxxx
Sent: Monday, February 11, 2002 4:23
PM
Subject: [RT] Strategies for Trailing
Stop-Losses
Hi,Many traders who trade persistence of market
direction (trend followers, momentum players...) use stop-loss orders to
attempt to limit losses.These stop-losses can be resting orders in the
market or in the mind of the trader.There are as many stop-loss
strategies as there are traders.Initial stop-loss positions are not
the subject of this email. Rather trailing stop-losses,
attempting to lock in running profits are considered here.The task
can be summed up as balancing getting out too early and losing too much
profit potential and giving up too much of the existing running profit if
the market has turned.Based on the experience of traders coached, the
two of the most successful techniques for trailing stop-losses appear to
include: -
percentage of move,
- trend-reflection.Percentage of move is
a strategy of using variable sized gap between the current price and where
the stop-loss is placed. It is based on the idea that
the size of retracements is normally proportional to the size of the
move.This said, where do you start counting the start of the move that
might be retraced? It is probably either an art, or by
experiment, a balance as always.Trend-reflection is based on
concepts apparently sold by James Sloman to Welles Wilder and published in
the latters "The Adam Theory of Markets, or What Matters is
Profit".In summary it assumes that the future is a reflection of the
past. The idea is that the technique can give a good
indication of where a future retracement might terminate and so where a
trailing stop-loss might be best placed. Whether the technique
has merit or not, selecting trailing stop-loss points is probably an art
or by experiment a balance as always.Question:Are these
techniques better that others or are the traders who select them just
better traders than others. I do not know the answer, but
they seem to be both used with varying success on many categories of
markets.What technique(s) do you use, and why, with what results based
on how many instances on what types of markets?How do you
balance the benefits and costs of trailing stop-loss placement?What
types of stop-loss order do you use, and why, and with what results based
on how many instances?Unconditional regards,
Ric.www.traderscalm.com To
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