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Online Share Trading

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Stop Loss blues

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BlueDolphin
Frequent Contributor
Why is it that as soon as my trailing stop loss is triggered, the share makes a u-turn, almost immediately!? I know it just feels like that way. It happened today with SOL. But I will make a chart print out of that one that went all the way to 50 ...but was stopped out long b4 at 200.
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DawieB
Contributor
LOL... Know the feeling dude! Had a few today as well... But just had a VERY nice runner... 130 points on the ALSI.. makes the losses-stres fade away.
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Not applicable
I have to say, I am not a big fan of trailing stoplosses. The problem I have with them is that they get set at random locations, x number of points below a high - instead of at obvious support and resistance areas. I have backtested virtually every system I know on Amibroker, and can categorically say, a system that takes profit at a certain percentage gain, outperforms a trailing stoploss almost every single time.
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to continue my point - a stoploss is supposed to kick you out of a trade for the right reasons - i.e. at a clear indication that the direction on your trade has changed, or at a profit target level. A trailing stoploss kicks you out of a trade for completely the wrong reasons - 90% of the time at a pullback from a recent high, which in a bull market is completely normal.
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BlueDolphin
Frequent Contributor
Yip, dit is waar! But I have lost (went below cost) more on not having a TSL than on having one. The profit could have been more though - on some.
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Rams
Super Contributor
You will have found the Holy Grail of trading if you can figure out the Stop Loss placement...resistance and support is also random because its based on probabilities.Taking profit at fixed percentages will make points here and there but it will get wiped out with a few loosing trades...to win consistently you must be able to determine the highest probabilty STOP!
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Question?Can u place 2 stoplosses in series to make sure u are cut out.
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Rams
Super Contributor
i did ask Simon in index course...can place trailing and fixed..i use it to keep the last contract in the trade at fixed, ie I trail say 3 and fix one so last one has a chance of reaching target but for that contract, I will move stop to breakeven. My question, can you put the limit about 300 points away for a 50 point STOP so thaty if the market gaps you will be stopped out?
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DawieB
Contributor
Just make sure your price limit is wide enough, then it WILL stop out. Maybe just a bit less than you would've liked. What I do do is place a trailing, and then place fixed stops along the way. As the trailing move over them, I then cancel them. Oh, just one thing... if you do place 2 stop losses close to each other, they may trigger at exactly the same time, giving you double the effect (maybe selling twice, in stead of once...) haven't experienced it yet, but maybe...
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Not applicable
Try setting stops on a close below the lowest point in the last 5 days, with an absolute exit 2% below that level. So you set an automatic stop 2% below the lows, but you exit on the close if below. This is at least better than a trailing stop - which has the seriously undesirable effect of kicking you out on pullbacks off a recent strong move. My methods are a bit more complex - but this will at least help not to get kicked out of rallies unnecessarily
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Rams
Super Contributor
i think the trick is to use the same system of setting the stop all the time, especially for ALSI intraday...as long as its a valid system, how you set it up probably makes no difference over a number of trades
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