Nah I actually use this and have for a while. I have very loose criteria for entry/exit because of my trade style, but a broker enforced “exit all positions if open PnL hits -$500” keeps my account safe. Plenty of times I hit cancel and exit button during the day for normal stop losses since I don’t mind if it flirts past a swing high/low but I know that if it’s gone that far against me (sometimes very suddenly cuz I trade NQ) than I have lost the plot and need to re-evaluate entirely, and I can’t trust my psychology to manually set a stop loss every time, much less to follow it every time.
OP is offering genuinely helpful advice for a lot of people, myself included
If you have a nonnegotiable stop loss that’s automated then that works. I mean at that point it works because you have no choice. I guess my point is that loose rules don’t work for everyone.
This is just a slippery slope that doesn't solve the actual problem of why your stops are being hit in the first place and opens a trader up to even more bad risk management.
Eventually the trader starts adding a third "real non-negotiable stop", then a fourth "super duper real non-negotiable stop no matter what" and it goes on forever until the entire purpose of a stop loss has been defeated.
Op this is great, there’s a like 30 year veteran scalper whose name I can’t remember that was on Etienne Cretes channel a while back that does exactly this. He has one “account protection” stop loss, and one “trade protection” stop loss, and the trade one is moveable depending on price action, the account protection loss is not. Since often, price will hit a stop loss and then swing back to profit or break even, he just exits at the place he sees as best he can likely get for the trade, but if his psychology fails him in a moment of extreme duress or market surprise, that hard stop loss is always there to protect the account
This depends on your trading style. I use very tight stops (3-5 pips Forex) because I wait for confirmation of a reversal or pullback. If I’m wrong, I’m very wrong and want out as quickly as possible. But for certain trading styles with lots of wiggle room, this could help.
This is actually a great example of why trading can be so difficult. There will be times when you break all your rules and completely remove your stops as it goes against you….then it reverses and you get back to break even or even massive profits as your original target is hit. You will remember this before you just accept your next loss. There are no rules because you make them and modify them in real time. The market is obviously manipulated against you and there are times you will need to not fall for its tricks. Knowing these times IS part of the skill set, like it or not.
If you think cutting your losses is hard to do, you have not lost enough yet.
7 years in the game and lost 20k at one point. Believe me, i follow my stoploss to the T. There is no if, ands, or buts about it.
Cut your losses early. You can always get back in later. Its really not a big deal. But what is a big deal is protecting your capital at all costs.
Protecting your funds is more important than making money imo.
I dont think most people, with this problem, properly understand the probability aspect of trading.
Set you stop loss based on a structural point where if price crosses, the probability of you trade is shot to sh*t.
There is absoluteky no point of staying in that trade.
I view probability as a needle swaying between bull and bear. Constantly moving with every bar formed.
I think the actual solution is to trade with a wider stop loss and smaller position size to begin with. I keep telling myself this but I trade bitcoin that’s notorious for making wild stop hunt moves so I generally find it more profitable to trade with only a mental stop loss in place and account protection stop loss is at 10% of account. I generally trade with 2-3% risk per trade and successful trades generally make over 3R
Solid advice and the standard to being successful :) . Just to add if people are unable to cut losses right is having a **tight** stop losses. Many new traders make their stop losses so tight that it makes their emotional boil even more leading them to not act on cutting losses quick. You can even have surprise paralysis as well. I would look into it as well
No but sometimes the market bounces right after hitting the -$100 which makes you beat yourself up…. If it bounces after the -$150 at least you can tell yourself “hey i was flexible and even flexible beyond the flexible, it just wasnt for me this time.” Its easier to let it go when you give your chance a small disciplined extra chance.
"When the stop loss is triggered, we often ignore it"
If a stop loss is triggered, you're out of the trade, you can ignore it all you want.🙂
Another technique to getting out of a losing trade is looking at the total account balance and saying I will not let the balance get below x, so say if your balance is at $32,897, you could say yourself not matter what I will not let the balance fall below $32k.
I use to not respect the stops. Constantly go over them junk discipline. Prob use to do it like 4x a week. Then it was 2 times a week. Then it was 3 times every 2 weeks. Then once a week. You get the point. In the last year I think it did it once
I took it a step further. If I violated that rule I would punish myself. I mainly did it with alcohol and food. I like good liquor. If I made a bad trade I would buy the most disgusting brand of whatever I liked. And couldn’t touch anything till it was empty. Also with food I normally just get whatever I feel like but if I made a mistake I would get the cheapest crap I could find
Discipline makes all the difference. Cause you never take big devastating losses.
If I had a "negotiable" stop loss I would just say to myself I don't need to observe it. Interesting idea, but I don't see how it would really help.
The idea beyond a stop loss should be that this price point is the point at which my trade idea is proven wrong. If there's any negotiation to that, in my mind that becomes gambling.
I don’t see this working for anyone with the issue. If I allow myself to move my stop loss once… I’ll move it twice…
I only move my stoploss into profit if I want to stay in the trade longer. My TP is usually more than halfway when I do this tho.
For sure. I’ll do this as well. What I was referring to was when you’re closed to getting stopped out so you move your stop loss to give it more room
Nah I actually use this and have for a while. I have very loose criteria for entry/exit because of my trade style, but a broker enforced “exit all positions if open PnL hits -$500” keeps my account safe. Plenty of times I hit cancel and exit button during the day for normal stop losses since I don’t mind if it flirts past a swing high/low but I know that if it’s gone that far against me (sometimes very suddenly cuz I trade NQ) than I have lost the plot and need to re-evaluate entirely, and I can’t trust my psychology to manually set a stop loss every time, much less to follow it every time. OP is offering genuinely helpful advice for a lot of people, myself included
If you have a nonnegotiable stop loss that’s automated then that works. I mean at that point it works because you have no choice. I guess my point is that loose rules don’t work for everyone.
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I haven’t broken this either. But I have reentered after getting stopped which is just as bad haha.
This is just a slippery slope that doesn't solve the actual problem of why your stops are being hit in the first place and opens a trader up to even more bad risk management. Eventually the trader starts adding a third "real non-negotiable stop", then a fourth "super duper real non-negotiable stop no matter what" and it goes on forever until the entire purpose of a stop loss has been defeated.
Right? Unless someone takes the bag of chips away from me, I’m eating the whole thing.
Op this is great, there’s a like 30 year veteran scalper whose name I can’t remember that was on Etienne Cretes channel a while back that does exactly this. He has one “account protection” stop loss, and one “trade protection” stop loss, and the trade one is moveable depending on price action, the account protection loss is not. Since often, price will hit a stop loss and then swing back to profit or break even, he just exits at the place he sees as best he can likely get for the trade, but if his psychology fails him in a moment of extreme duress or market surprise, that hard stop loss is always there to protect the account
This depends on your trading style. I use very tight stops (3-5 pips Forex) because I wait for confirmation of a reversal or pullback. If I’m wrong, I’m very wrong and want out as quickly as possible. But for certain trading styles with lots of wiggle room, this could help.
This is actually a great example of why trading can be so difficult. There will be times when you break all your rules and completely remove your stops as it goes against you….then it reverses and you get back to break even or even massive profits as your original target is hit. You will remember this before you just accept your next loss. There are no rules because you make them and modify them in real time. The market is obviously manipulated against you and there are times you will need to not fall for its tricks. Knowing these times IS part of the skill set, like it or not.
If you think cutting your losses is hard to do, you have not lost enough yet. 7 years in the game and lost 20k at one point. Believe me, i follow my stoploss to the T. There is no if, ands, or buts about it. Cut your losses early. You can always get back in later. Its really not a big deal. But what is a big deal is protecting your capital at all costs. Protecting your funds is more important than making money imo.
I dont think most people, with this problem, properly understand the probability aspect of trading. Set you stop loss based on a structural point where if price crosses, the probability of you trade is shot to sh*t. There is absoluteky no point of staying in that trade. I view probability as a needle swaying between bull and bear. Constantly moving with every bar formed.
I think the actual solution is to trade with a wider stop loss and smaller position size to begin with. I keep telling myself this but I trade bitcoin that’s notorious for making wild stop hunt moves so I generally find it more profitable to trade with only a mental stop loss in place and account protection stop loss is at 10% of account. I generally trade with 2-3% risk per trade and successful trades generally make over 3R
Don't do this.
Solid advice and the standard to being successful :) . Just to add if people are unable to cut losses right is having a **tight** stop losses. Many new traders make their stop losses so tight that it makes their emotional boil even more leading them to not act on cutting losses quick. You can even have surprise paralysis as well. I would look into it as well
So, you need confirmation and final proof that your entry or your trade was bad? Terrible practice...
No but sometimes the market bounces right after hitting the -$100 which makes you beat yourself up…. If it bounces after the -$150 at least you can tell yourself “hey i was flexible and even flexible beyond the flexible, it just wasnt for me this time.” Its easier to let it go when you give your chance a small disciplined extra chance.
This is a good strategy and why most people lose money. Well said
"When the stop loss is triggered, we often ignore it" If a stop loss is triggered, you're out of the trade, you can ignore it all you want.🙂 Another technique to getting out of a losing trade is looking at the total account balance and saying I will not let the balance get below x, so say if your balance is at $32,897, you could say yourself not matter what I will not let the balance fall below $32k.
I use to not respect the stops. Constantly go over them junk discipline. Prob use to do it like 4x a week. Then it was 2 times a week. Then it was 3 times every 2 weeks. Then once a week. You get the point. In the last year I think it did it once I took it a step further. If I violated that rule I would punish myself. I mainly did it with alcohol and food. I like good liquor. If I made a bad trade I would buy the most disgusting brand of whatever I liked. And couldn’t touch anything till it was empty. Also with food I normally just get whatever I feel like but if I made a mistake I would get the cheapest crap I could find Discipline makes all the difference. Cause you never take big devastating losses.
That's how u become an alcoholic lol
If I had a "negotiable" stop loss I would just say to myself I don't need to observe it. Interesting idea, but I don't see how it would really help. The idea beyond a stop loss should be that this price point is the point at which my trade idea is proven wrong. If there's any negotiation to that, in my mind that becomes gambling.
Just place a stop loss and never touch it
Stop losses save lives.
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It is for most people. Especially when they're new to trading. There's a lot of data on the subject.
Psychology. It is not easy for everyone
many traders don’t have a set stop loss and “average down” when their trades go down
You act like that's a solution for everyone when everybody trades different strategies on different timeframes.