Day Trading. Tight Stops? Wide Stops? No Stops?
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- Опубликовано: 19 дек 2016
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Do you utilise stops in your trading? Steve Ruffley, day trader comments. Do you utilise stops in your trading? Guys, please appreciate this guy is a day trader, meaning he holds and sells positions for very short periods and as such his methodology may be different to others.
Is utilizing stop loss orders for the average trader a good or bad idea? It is often said that stop losses the main reason for being taken out of the game? How do you handle losses? What is your method in risk and money management? How do you trade size and manage larger positions? How do you effectively average into and out of trades?
Stops are a good idea for beginner ideas but maybe not great for day traders. The problem for me is that I'm not really long enough in the markets for stops to be a factor. I don't think you ever get used to big losses - you take your dog for a walk or perhaps try to speak to your partner about it but it doesn't really help. That's why trading is a very lonely procession.
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It's funny, I agree and disagree at the same time. After a couple of years of trading experience, I can honestly say that TIGHT Stop losses caused me to LOSE the most trades but I had more success with wider stop losses and lower position sizes.
I think she is a really good interviewer.
He said beginners should use Stop Losses. He is not a beginner. He said he activates his own stop loss. You need to listen.
After ~10 years of trading experience, mostly day/swing trading, I can tell you the #1 RULE : absolutely have stops else risk getting wiped out sooner or later! If you start trading with stops (not too tight, at least 1.5 to 2 ATR) but no target (yes no target or a large target!), you will see than in the long run you WILL make money despite a low win rate. The temptation to win KILLS you in trading. Being "aggressive" in trading and as a result doing absolutely silly things such as averaging or having no stops is very very stupid!
This guy is the epitome of what trader should be. He cuts to the chase,no bullshit whatsoever.
And he is 100% right about not using stop losses. I mean come on, as a day trader we all know they are just the lines that most of the times are gonna get hit unless you are using wide stop losses which may result eating your risk reward. You spent enough time in market, your instinct will build;trust me. And I'm not talking about spidey sense that tingles. Those instincts came from lots of hours of studies and years of experience (2 should be enough).All you need to learn is to act on that,then you wont need lines to tell you exit trade. You will know that by the market behaviour
1) *Nobody* is ever 100% right when it comes to forex.
2) if your stop losses are getting hit most of the time, you're stop losses are to short
3) instinct isn't right 100% of the time and market behavior can behave unpredictably at times.
Even if you were to set your stop losses near your margin call to prevent negative balance or total blowout, it's still better than none at all
You people are criticizing a system without even knowing anything about it, nor if this guy is profitable or NOT.
He may be scalping for ticks, so he doesn't even have to bother about PLACING a S/L, because he goes in and out in seconds and keeps his eyes on the market, and still MAY BE using "psychological" stops. He could also be using an strategy with very high win% ratio (there are strategies above 90% with big/small losses, that are still profitable on the long term). Did you even consider he may be using arbitrage, hedging or one of the so many tools other than S/L? He may trade news/hedging, he may sacrifice small accounts for aggressive earnings. There isn't just one way.
You should practice something called "healthy skepticism" if you want to keep learning. The important question isn't WHAT he uses or WHAT NOT, but DOES IT WORK ON LONG TERM? And if you can make a living out of it, the "what" becomes irrelevant.
In my experience, WIDE stop losses was the KEY for me to having a MUCH better win streak and be more mentally confident about trading overall. I can't tell you how many times I placed trades and they go against me despite doing all the correct technical analysis and in the end, they come back in my favor. Tight stop losses nearly stopped me out almost every time and it was the main reason why I blew through so many accounts! You really do have to give those trades room to run. What I considered a tight stop loss was anything less than 30 pips but I had no idea that some traders would consider a 100 pip stop loss to be a tight stop loss. It depends on what the potential reward would be. A 100 pip stop loss is cool if the potential reward is 400 pips+ and ofcourse depends on risk management/lot sizes. I would think that this would be better for Swing trading.
This guy has said countless things i agree with. I don't trade with stops either. I manage it with allocation size alone.
Not only he does not use stops but he also averages down. What a champ.
i really like this guy he is a no nonsense guy about his money and does not conform to what most people expect
It depends on the market conditions, there is no one size fits all solution because the markets are dynamic.
Have a lot in common with this guy. SL has play against my trade over and over. Stopped using it and started winning. It come down to everyone's style.
One day in 2015, the Swiss franc fell 25% in 20 minutes. People without stops lost their whole account. Some ended up owing the broker their house. So I use guaranteed stops with CFD's, but I always close the position before they are triggered.
If you are new to trading and watching this vlog, please please please USE STOPS!! This guy is demonstrating very bad trading habits.
He talks so much sense.....if you want to take a lot from trading, then first you have to give a lot, and sacrifice a lot. It's a lonely and hard life and a real test of character.......it's also the greatest job in the world !!
Instantly hit the like button when he said he trades without stops. True risk management at hand if you dont need a stop loss. 🍻
He said: "when i feel a trade isn`t working for me, i go out of the trade."
Thats nothing else than a stop.
The very best traders are still not seen giving advice on RUclips
Excellent interview. So glad I watched!! Thank you!
Stop loses is brokers money
The Turtle Traders did use a volatility stop, they had an exit plan but they did use a hard stop also.
Definitely don't kick dogs.. great interview with honest answers
Love this guy. Needed to see this after the wk I had
Man goes losing money is same as losing a pet 🤣🤣🤣
great show im looking forward for more interviews like that its very unique
everyone has their own philosophy when it comes to trading. do what works for you..
If you are a fresher always trade with a stop loss, as time goes on and your winning average increases and you become more emotionally stable, of course you can trade without stop loss..especially if you are going in and out of trades in seconds...I think he does momentum trading most of the time hence the lack of stop loss
I use market orders sometimes if the market is turbulent or climbing fast, but I still always have a stop, I know where my maximum risk is on any trade.
this man speaks the truth. he is a real trader.
i dont use stops in my trading but i handle my risk a lot differently to whats taught in courses and the plethora of free info out there, i can be in drawdown for weeks or months but never ever go beyond 10% of my account being risked, i say play the long game, use smaller lots and your account will build, but this requires patients which a lot of traders dont have
'it's a lonely life.' -- maybe i am cut out for this, lol
Excellent points. This is guy is a super legit trader. As a fellow trader, I can resonate 100% to what he has said, especially when he says, "I became a different person"... Its a crazy good skill to have as long as it works...! Cheers
Genuine proper trader, I have met many and the good ones are normal guys like him.
I like his style of trading.
if you have done your analysis correctly and you enter a trade, do not set a tight stop lose but if you think that there is high volatility going on and you want to jump and snip, tight stop loses are your best option.
“I tell myself when I’m wrong -I don’t wait for market to say it “ wellsaid...
I just don't know, I hear him but I was taught if you don't set stops you shouldn't be a trader, and have felt it first hand. Market can move against you quickly lol.
Where can I see the whole interview? As a suggestion, it would be very usefull that you add a link to the first video of the interview. Tks a lot for your hard work!!
All i'll say is if you're new, and thinking of not using stops, you'll be refunding your account very often. Use stop losses until you're psychologically able to take a losing trade off your self.
He's spot on !!!
What if the price keeps going down and never returning back ? Sometimes no stoploss can wipe out a large amount of capital irrevocably.
Always use stop loss, wider enough to be clear of ups and downs of the market to gain big profits. Trailing with wider stop loss can be more useful say 75% or 80% keeping a reasonable take profit.
Rather than being willing to take loss larger than 2%, wait for better entries and trade something less volatile at your skill level.
Taking losses larger than that stack up fast and make it hard to recover especially if you trade frequently.
Managing your trades by keeping the position size small relative to your account size works better than whole position stops. Averaging is just trying to trade like an old pit market maker but you need a market maker sized account to do it. Otherwise, trading without stops makes you part of the 95%.
I agree with 1 thing. Stop losses do NOT limit risk. If you do? take smaller positions and higher TF. I am 38 Months ( almost ) loss free. and the losses what I take at the moment are very very small. correct me if I'm wrong please. Always open to learn and discuss.
It is not always black and white....stop or not. I use "mental stops" with no specific price point used but more of a "thingsI start noticing that I'm getting nervous...that's when I cut it
If you don't have stops and you are watching the trade, i guess if it goes badly wrong you can hedge it while it is going wrong, then if it comes back right unwind the hedge. But in the disaster scenario where a (server side) stop gets you out of jail, you might not be able to hedge. I am wondering if stoploss strategy needs to consider current conditions. So if strategy is winning, squeeze the stoploss, and if strategy is losing let the pressure off. This is what i am experimenting with at the minute.
Interesting interview.
Great Vid!
There is a difference between losses and manageable losses and that's what distinguishes consistent gainers versus long term losers.
Place your stops where your strategy or hunch fails. Forget RR ratios
If you are not over-leveraged and are trading a size well within your account limits, then you should never use a hard stop. Unless it's a trailing to take off a profitable position. Or a partial loss on a larger position. In my experience hard stops have lost me more money than any other thing, and cause a lot of emotional problems such as revenge and over-trading. If you are over-leveraged and under cap then you kind of have to use them, sadly.
Jason Russell i share that experience, especially on daytrading large size, stops are the usual reason trades dont work out and they do work out like 10 minutes after went to stop, thats why i hedge. That cuts my loss-rate down by about 45% while maintaining the same risk.
I trade biotechs and I don't use stops, the volatility has wild swings similar to that of trading crypto. no stopping out here
well, if your on spot trading, you dont need a stop loss, your there to cut the losses, you can market sell, if you have a stop market placed, youre gonna suffer slippage any way, if its is a stop limit, its gotta be wide, thus ur position have to be much smaller
Trading is really tough and stressful, you have to be constantly on your A game. Long term investing and pound averaging works better for me!
I’d be surprised if he was still trading
This guys trading philosophy obviously unique to him ,i used stops then started trading without them because of whip lashes ect. I m now beginning to think about reverting back to use of stops. The majority of traders lose because of a few big losers, or one trade which wipes out their account , it about reversing this, more small loses and more bigger wins
Do both strategies with S/L and no S/L depending on how you manage trades. Technical analysis plays the vital role on this style in trading.
great video
Definitely not ridiculous.possible easily..it’s just we all don’t have the acc size to do it..he says he is happy with 2-4 pips..that explains the size..
Damn, best Answer in the first 5 secs.
This guy will take a big one at some point.
it seemed like a very unpleasant interview... after asking him 1 question... you dont want to ask him any more.. its as tho if he's getting irritated!
This guys a Muppet... I'm a full time trader myself and I always have a stop, its not necessarily a tight stop but its not a ridiculous stop either. The only way you can never use a stop is if you have a big enough account to never run out of equity where you can let trades run against you until they come back into profit.
Joseph Barreca or you trade smaller if you don't have much; That way you can do the same
...
Loved him😂❤
If you trade small cap intraday and are short biased and you don’t use a stop, you will lose everything day 1.
Trading with out placing stop , that mean is the end of salamon grandy story end ) money management is some thing we can't ignore at all , but it is not necessary at all times, it depends on your trading strategy .. reward to risk ratio ... etc
The poor house is full of traders who didn't use stop losses. Pretty horrible idea.
Interesting..
No stops,is a second chance to eventually win.....so your win rate goes up....bigger the risk,bigger the win.....
i can relate to what he says, especially the last line, what trading has made me become, now i'm a loner, but thank God i have a gf
Turtle Traders did use stops!
and yes he does have money management whether we like it or not...he will average down... which means he leaves room in his account because he could be wrong....
if that wasn't the case then he would just bet the entire account on each trade....
To stop or not to stop, thats the question here.
Always use a stop loss with a 2:1 or 3:1 R/R.
Not using a stop-loss is a fast track to blowing up your account
Excellent video.
I also don't use stop losses.
A difficult interview that one..
"i don't trade with stops" "i decide when the trade isn't work...i don't let the market tell me"
what does any of that even mean?
Stops I find are too easy to hit....Market makers hunt for them all day... Too many time stops are hit for a split second and then runs back up. Stocks very notices are to hunt for stops. Statistically speaking nif you use stops you lose money . Not to mention the slipping you get.
try not using a stop loss in a volatile market like Bitcoin
I used set up stop los and always ben on minus, I stop and making money.
Where is this guy now ?
My family never seemed happy when I did well in trading...
I'm sure he means not using physical stops but he must have a mental stop number in his head . I least i hope so. I think he should have explained that a little more here.
You could trade without physical stops but MUST at the very least have a mental stop
where you will bail . Must have the discipline to honor that , or you are gambling. imo
What he literally said is let the market tell you when to stop out, not just putting some arbitrary number like 2% like many amateurs do. Reward/Risk is taught at a beginner level to people that don't have proper strategies to begin with, coupling the beginner ratio with bad strategy is a recipe for disaster and this what they said at the beginning, a lot of people stop loss out of trading all together. Stop losses can be good or bad, depends on way more variables (too many to list here).
I would marry the interviewer
yes, both, arrogant and stupid. Preservation of capital is the single most important rule of trading.
I can't pay attention. I just want to listen to her voice on repeat while I lose money
If he's not implementing a trailing stop at some point he is either lying or a fool
Swaggy is a genius
absolutely ridiculous not to use stops, stops are risk management and
without risk management you're just gambling your money. Just my two
cents
This is not accurate. Beginner risk management trains people to use stops at arbitrary percentages, not because that's what is best but because that is the best way to teach a beginner.
another way for risk management is using lower trade size about 0.5% per trade and at maximum of 20% total trades, with this method no need for SL as even 2000+ pips down it can't defeat your trades/positions and your account, you can continue to fight back and make money.
Therealltaken10 stops are final, there are many other ways maintaining your risk without a stop, not knowing it any better does not make it a bad thing! I for example do hedge directly in the same asset, and trade the same setup at another price, this results in cutting the losing-quote in half.
that doesn't means that he doesn't cut his losses!
exactly !
just because peoples have a different aproach and not share the interest in getting stoped out by institutions .. does not make them "ridiculous"
yes absolutely ridiculous not to use stop. that's part of the job. its the least you can do.
So this guy wins 100 percent of his trades?
No stop-loss is a no brainer specially for day trading.
does anyone know her name?
i feel like this guy is attached to his money and that's a big problem
*_"We don´t advocate kicking dogs"_* - She´s absolutely right
Ther are horror stories of people trading without a stop loss!
This guy sounds similar to me