| LongKC - 10/2/2015 14:59
It's a good post, wisdom from which I can benefit. One challenge I've had is that, with minis, especially wheat minis, using stops is perilous because of the liquidity and the book algorithm. The NG minis have good liquidity I'm realizing, I should have put it in. Also, in some ways, risk is a relative thing, at least risk tolerance. In depressed markets I think there is a time--for those who have the tolerance--to continue to build into long positions with no stop, and add to them. On the short side, I dunno that's gonna work, but I can easily see someone out there saying, I'm gonna buy wheat at every dime below $4.70, or NG at every dime below $2.50. But there shouldn't be any surprises, no morning when a trader asks "What have I gotten myself into?" We need to know going in when we're getting out. But I can see a set of rare circumstances where stops aren't necessary. Goldman Sachs thinks crude is going to $20, if that happens, I can see someone saying, I'm gonna buy it, with no stop...Of course something like that is rare, and you're right, any of us speculating in these markets should or must have a defined risk.
Fry, I will have to do some looking when I get time. I have some biases that have made me zone out of the PM's. I also have the opinion like I stated before that when you are thinking about your kids heading to college, it will be time for the next major rally in the PM's. Us (not you) old duffers might not even be around to see it..
Long...Not sure of you account sized but the symboll NG is 10 per tenth of a cent. A 1.5 cent stop is $150. The margin on that is around 2500 i believe.
At the risk of offending norstman again, I would say that likely your stops are not placed correctly of that js happening repetitively. Your stop needs to be hiding behind someone bigger than you's orders. If your stop is inside a swing, you will likely eat it. If you are hiding behind fake structure, you'll eat that one too. On top of that your stop needs to compensate for the noise of the market, so that value needs to be added to or subtracted from the level you choose to hide behind. Sticking your stop 2 ticks below a pivot in a market that has 15 ticks of noise, and you'll eat that one as well.
Send me an email with an example or two of where you got picked off at and I will help you....if you want of course.
I heard chatter about crude possibly trading much below the level you mentioned. Not projections just this is possible. How would you like to be the guy buying oil when it was on sale at $70, adding at 60 and 50, with no stop? Trading without a stop is like running a new 600 hp quadtrac without ever changing the oil.....you will get by with it for a while. |
Sorry Coolhand and Young Gun
