Hard Stop Placement – The Great Contradiction?

[WWWW 10]

Hard Stop Placement – The Great Contradiction?

 

Will a seasoned trader please…please advise here?

 

After 3 years of research and full time trading, I remain troubled (by apparently what continues to trouble even seasoned pros I am told).

 

Here’s the issue: We are told to set a hard stop, for example outside of a price channel or at a support level, etc. as a “hard stop. This is to supposedly allow the trade “enough room” to develop and prevent you from getting stopped out too soon.

 

YET – we are ALSO told by Pros – NEVER let price hit your hard stop but ‘manage the trade” – and get out sooner – at something far less than the “hard stop”. Again – “NEVER let it hit the stop you just placed at the most recent swing high or closest support level or channel line, or any place else your system "rule" told you to place it.”

 

So…won’t this result in premature exits? After all, if we never let it hit the hard stop, we are never giving the trade “the room it needs to go through it’s ups and downs”.

 

What are we to do? Use the “set a stop just outside the price channel” or just above the last most recent swing high” etc etc OR – do something else?

 

And yes - someone might respond that - it's whatever you are comfortable with...or...you must always manage your trade (of course!)...or there are no hard and fast rules....

 

The BUT is that there are Pros who make this a hard and fast rule, yet the wisdom of each of these rules are OPPOSITE. Unless I am just missing something.

 

Any specifics and guidance would be greatly appreciated. Thanks for your time and wisdom.

[Kiwi 16]

There is only a contradiction in that NEVER.

 

An initial stop should represent either your view of when the original premise is wrong or (better) when the probability of failure to stop suggests the stop should be. Everything in trading should really be probability based ... because any stop can be moved through and then back again.

 

Then, as a trade develops sometimes it will take out your stop. Other times you'll move forward inexorably towards a solid profit. Other times market behaviour will not match that expected by your setup and you exit early because probability now favours a larger loser if you don't get out now.

 

But there are no absolutes - there are only probabilities.

[SIUYA 11]

as with what Kiwi said.

Often a hard stop maybe used to say - this is the level I definitely know I am wrong and hence can price my position sizing on this, however, if the trade does not do what I think it will do I may stop myself out earlier than expected for a smaller loss.

 

However, depending on method, you ideally might need to have a mechanism that gets you back into the trade again should it look good again

This is often the catch - what if i miss the trade that makes the money?....Well that is why you might get out when the trade does not do what it you expected before your hard stop in order to lessen the loss, and probably allow you to go at it again should it start to become favorable.

Would you rather then times at a trade where you loose 10 pips or one time at it where you loose 100 pips?

 

plus have you ever heard the rule - I must let my stop get hit? (as opposed I am prepared to let my trade have room to breathe)

[Predictor 11]

First, many pros use a catastrophic stop which is a stop many times larger then what you would imagine -- in most cases. We read the tape and order flow and monitor the trade over time and exit before the stop is hit, in most cases

 

It is not uncommon for a trade that is exit in this way to actually work out. What I have seen is that trading in this way, using order flow, will tend to produce a more consistent ratio between the average win/loss versus using the largest stop possible.

 

Using the largest stop possible will produce greatest net return assuming one can consistently hit targets but it leaves one open to taking a larger tail risk

 

The edge is very small in active trading.. so giving up needless ticks by taking stop hits is costly

 

 

Hard Stop Placement – The Great Contradiction?

 

Will a seasoned trader please…please advise here?

 

After 3 years of research and full time trading, I remain troubled (by apparently what continues to trouble even seasoned pros I am told).

 

Here’s the issue: We are told to set a hard stop, for example outside of a price channel or at a support level, etc. as a “hard stop. This is to supposedly allow the trade “enough room” to develop and prevent you from getting stopped out too soon.

 

YET – we are ALSO told by Pros – NEVER let price hit your hard stop but ‘manage the trade” – and get out sooner – at something far less than the “hard stop”. Again – “NEVER let it hit the stop you just placed at the most recent swing high or closest support level or channel line, or any place else your system "rule" told you to place it.”

 

So…won’t this result in premature exits? After all, if we never let it hit the hard stop, we are never giving the trade “the room it needs to go through it’s ups and downs”.

 

What are we to do? Use the “set a stop just outside the price channel” or just above the last most recent swing high” etc etc OR – do something else?

 

And yes - someone might respond that - it's whatever you are comfortable with...or...you must always manage your trade (of course!)...or there are no hard and fast rules....

 

The BUT is that there are Pros who make this a hard and fast rule, yet the wisdom of each of these rules are OPPOSITE. Unless I am just missing something.

 

Any specifics and guidance would be greatly appreciated. Thanks for your time and wisdom.

[Kiwi 16]

The edge is very small in active trading.. so giving up needless ticks by taking stop hits is costly

 

 

For the OP ... note that there are two implicit assumptions in this statement that probably reflect the posters training method seeing he's a vendor.

 

1. the edge is very small

2. ticks to the stop are needless.

 

Think about the assumptions, deceptions, and pumping in posts that you read on TL. There are a hell of a lot of assumptions and, almost, a larger number of self-interested vendors on this site.

[MightyMouse 12]

I always use a stop and it is never mental. I use a stop as a risk management tool. My stop is assigned a max dollar amount that is pertinent only to me and is small in relation to my account and the amount of time I plan on being in a trade. My stop has nothing to do with being right or wrong. If I get stopped out, generally, the trade has a lot further to go before I am wrong about the trade and it frequently continues in the wrong direction without me in it, proving me wrong. Other times I will take lots of small losses and still end up being right and making a decent chunk of change on the trade. Ideally, I get in, do not get stopped out and the trade goes in my favor, but you can't always get what you want.

 

A mental stop allows the market to drain capital from my account while it decides if it is going to let me have it back. It's easier and more sensible for me to get out and get back in again at a worse or better price than to let the market have that much control over my money.

[steve46 12]

I have to agree with Kiwi and I certainly see why folks are critical of vendors...the problem from my point of view is that this makes it very difficult for those few who are trying to do something decent for new traders...

 

And Cyp (if you are reading my posts) now you can see what I was talking about in my response to your PM last night...

 

Best of luck to everyone

 

Steve

[steve46 12]

So I will post this to see if I can help out with respect to stops

 

The leftmost arrow shows where price tests and closes below a blue rectangle (a demand node)....for my system, if price continues we have a downtrending overnight market

 

Now what I do is to take the trade based on my criteria (the next arrow shows my entry)....and my stop is just below the previous low...for this market I have two (2) scenarios

 

in the first I take profits at 2, 3, 5, 7 and 10.....for the second scenario I take profit at 2, and 3 and I am prepared to get out there....generally because of a pending event (earnings report or economic report of some kind)..

 

I am willing to risk two points to get at least 2 and hopefully more points on each trade...I know what my expectation is, because I've done my research...from my point of view, it "costs me" 2 points (periodically) to win from 3 to 10...I know what the "frequency" should be (for me to win more than I lose)...and if that were to change....I would know within a few days....and then my job would be to figure out why....So far (over a period of more than a decade) I have only had to figure it out once....but it does happen.

Edited February 8, 2012 by steve46

[Predictor 11]

Actually, most vendors tell newbies they must use a tight stop loss because its what they want to hear and then they berate them when they lose. You see most traders quit when they learn will have to take some risk. Let's say you're positioned in a trade and you get stopped out. What do you do? You quit and go home? If you take another trade then what do you think can happen? You take more risk. Do you always reverse? If not then why would you take the stop loss in the first place?

Curtis-

The Market Predictor

[SIUYA 11]

If you take another trade then what do you think can happen? You take more risk. Do you always reverse? If not then why would you take the stop loss in the first place?

Curtis-

The Market Predictor

 

The do you always reverse question is an interesting one.

Just because you are wrong (or right), and wish to exit a trade certainly does not mean you should reverse. It might mean your timing for a particular trade is not great and the market might go against you for a bit first - causing pain/anguish/frustration whatever.

 

I think Kiwis point about the method/system used is more important - ie; size of ticks, size of edge.

It seems predictor that you are advocating a no stops system - as far as I can tell this must be a reversal system - otherwise if you are on the wrong side of a trade and something really trends you are stuffed - is this the case?

[MightyMouse 12]

So I will post this to see if I can help out with respect to stops

 

The leftmost arrow shows where price tests and closes below a blue rectangle (a demand node)....for my system, if price continues we have a downtrending overnight market

 

Now what I do is to take the trade based on my criteria (the next arrow shows my entry)....and my stop is just below the previous low...for this market I have two (2) scenarios

 

in the first I take profits at 2, 3, 5, 7 and 10.....for the second scenario I take profit at 2, and 3 and I am prepared to get out there....generally because of a pending event (earnings report or economic report of some kind)..

 

I am willing to risk two points to get at least 2 and hopefully more points on each trade...I know what my expectation is, because I've done my research...from my point of view, it "costs me" 2 points (periodically) to win from 3 to 10...I know what the "frequency" should be (for me to win more than I lose)...and if that were to change....I would know within a few days....and then my job would be to figure out why....So far (over a period of more than a decade) I have only had to figure it out once....but it does happen.

 

Well, for at least the last decade, it certainly appears that market participants have been well behaved when you decide to trade. Kudos for your discovery.

 

The best part, to the best of my knowledge, is that you didn't have to fight your way out of a room full of snakes, or dodge large falling boulders.

 

In my case I think I need a fresh read of "So ist der Lauf der Welt".

[Predictor 11]

Not advocating anything. I'm just sharing some realities and thinking outloud. Often I use tight stops and at other times I use larger stops. I've observed that PRICE stops are very difficult to apply effectively. The concept is good. I don't have all the answers.

 

From my experience, the tighter stop one uses the more aggressive they have to be at re-entry... so the losses can still grow to what a larger stop would have been at the start except the profits are usually less due to poorer pricing.

 

 

The do you always reverse question is an interesting one.

Just because you are wrong (or right), and wish to exit a trade certainly does not mean you should reverse. It might mean your timing for a particular trade is not great and the market might go against you for a bit first - causing pain/anguish/frustration whatever.

 

I think Kiwis point about the method/system used is more important - ie; size of ticks, size of edge.

It seems predictor that you are advocating a no stops system - as far as I can tell this must be a reversal system - otherwise if you are on the wrong side of a trade and something really trends you are stuffed - is this the case?

[SIUYA 11]

Not advocating anything. I'm just sharing some realities and thinking outloud. .

 

no problems - I thought you were pushing the concept of not using stops and reversing with your previous comment.

I do know there are some that advocate cut and reverse systems - I have never really looked into them, but it still seems that you are advocating not using stops at all......now clearly hindsight will allow us to be able to say "with this large stop we would have maxmised profit" but in reality live time dont you agree you need some sort of stop (mental, hard stop that is automatically traded, or a combo of both), otherwise you are not really trading and asking for trouble?

[Predictor 11]

I do know many professionals who don't use price stops. In my experience, I've also seen that no stops perform better then price stops. I think one needs to be very willing to admit when a trade goes wrong. I think one is well served by making their trades discreet. I like time stops. The main thing is a trader needs to be able to accept a risk upfront or get out.

 

The problem is when traders take these losses, they need someone else usually to get them out. I like a hard (controlled by the broker/someone else) max percent risk per day.

 

no problems - I thought you were pushing the concept of not using stops and reversing with your previous comment.

I do know there are some that advocate cut and reverse systems - I have never really looked into them, but it still seems that you are advocating not using stops at all......now clearly hindsight will allow us to be able to say "with this large stop we would have maxmised profit" but in reality live time dont you agree you need some sort of stop (mental, hard stop that is automatically traded, or a combo of both), otherwise you are not really trading and asking for trouble?

[SIUYA 11]

gotcha - you are distinguishing between stops.

ie; there are price stops, hard stops, mental stops, account decimation stops, max account loss for day stop etc; etc;.......

yes - not everyone has hard/automatic price stops, not everyone uses price stops - given the normal/usual regurgitation of money management using price stops - how would you suggest one size their positions using no price stops as a basis to do this.

A manager saying you can trade X contracts and loose $x per day - if you do in one trade or twenty I guess is one way.

[zdo 20]

...We are told to set a hard stop, for example outside of a price channel or at a support level, etc. as a “hard stop. This is to supposedly allow the trade “enough room” to develop and prevent you from getting stopped out too soon.

 

YET – we are ALSO told by Pros – NEVER let price hit your hard stop but ‘manage the trade”...

 

It’s "System Specific!" (zdo - scratched LP time again).

Listening to posters and “Pros” who do not include the base system being used as part of explaining the stop loss methodology is sort of like being given access to the loss liquidation rules book used in Walmart’s inventory management and thinking you can now apply just that info and duplicate their results in total enterprise inventory management and avoid any pitfalls in your own chain.

 

So, don’t be “troubled”. There really is no discrepancy !

Some systems do require a ‘hard’ outlier stop.

Some systems require getting out as soon as the trade is not working. It’s system specific! The cases where these two ‘rules’ would be used together would be in systems where you never let your stop be hit… but you are also in a holding period for the position where you’re not always in front of the screen, so you set a capital preserving “hard” stop for when you can’t be present, etc.

 

Let’s look at some of the other posts – keeping up front awareness that ALL of them are well intended.

 

Everything in trading should really be probability based…

from Kiwi

 

 

…depending on method…

from SIUYA

 

 

...probably reflect the posters training method...

from Kiwi, about Predictor’s post

 

 

…for my system…

from Steve46

 

 

These are ALL “system specific” replies ! :) . Now find out how similar their whole methodology is to yours to really determine if their discussion can help you with your risk management…

 

 

...

from MightyMouse

Yikes, nothing “system specific” !

For this particular poster, I would request he clarify for you his base method, then look at his posts in that light.

 

 

 

...

from Predictor

… and more not “system specific” !

 

and

 

Often I use tight stops and at other times I use larger stops.

from Predictor.

If applied to/within the same method, this is suspicious… but for some systems not out of bounds. If you can get at his underlying system… otherwise it's like retail chain inventory management using just 'loss leader' techniques… yada yada...etc.

 

 

 

 

The main thing is a trader needs to be able to accept a risk upfront or get out

from Predictor

This is one of the only valid overarching generalities we can make about stops and risk... Everything else - REQUIRE "S_st_m Sp_c_f_c !"

Edited February 8, 2012 by zdo

[BlueHorseshoe 10]

First, many pros use a catastrophic stop which is a stop many times larger then what you would imagine -- in most cases. We read the tape and order flow and monitor the trade over time and exit before the stop is hit, in most cases

 

It is not uncommon for a trade that is exit in this way to actually work out. What I have seen is that trading in this way, using order flow, will tend to produce a more consistent ratio between the average win/loss versus using the largest stop possible.

 

Using the largest stop possible will produce greatest net return assuming one can consistently hit targets but it leaves one open to taking a larger tail risk

 

The edge is very small in active trading.. so giving up needless ticks by taking stop hits is costly

 

Predictor has given this same advice about stops on other threads - rather than me writing a post to say exactly the same thing, go back and read through his post - it is all very good advice. Hope that's helpful.

[zdo 20]

re "Predictor has given this same advice ... it is all very good advice. "

Danger

:helloooo:

It is all very good advice for a set of specific systems only - not generally...

[BlueHorseshoe 10]

re "Predictor has given this same advice ... it is all very good advice. "

Danger

:helloooo:

It is all very good advice for a set of specific systems only - not generally...

 

Hi ZDO,

 

Yep, my fault - I hadn't read Predictor's original post carefully enough, and there are some bits that I don't think I'd agree with. So, specifically, I was agreeing with the statement that stop losses will damage the performance of a strategy.

 

From the tone of your recurring 'broken record' posts, would you say that there are no 'universal laws' that are applicable across all strategies? Certainly some of oft repeated adages such as 'cut your losses short yada yada' don't apply to all strategies, but don't you think there is any rule that applies across all systems/methods/styles of trading?

[Predictor 11]

I think you're over playing the "system specific" recording. But, I do think in terms of combinations and I think that is important. Now, in general, mean reversion systems will do better without stops but momentum systems can in some cases benefit from stops. Of course, with any system one is assuming that the system will continue to work which may not be the case.

 

I think trend following methods are the hardest actually to make work with stops. I suspect this is why so many amateurs lose: they are using the wrong combinations. But, I'm not claiming I have the answer either.. this is something I think about a lot. I'm pretty sure if I could find the answer then I could make a lot more in terms of profits.

 

The Market Predictor

 

re "Predictor has given this same advice ... it is all very good advice. "

Danger

:helloooo:

It is all very good advice for a set of specific systems only - not generally...

[SIUYA 11]

I think you're over playing the "system specific" recording. But, I do think in terms of combinations and I think that is important. Now, in general, mean reversion systems will do better without stops but momentum systems can in some cases benefit from stops. Of course, with any system one is assuming that the system will continue to work which may not be the case.

 

I think trend following methods are the hardest actually to make work with stops. I suspect this is why so many amateurs lose: they are using the wrong combinations. But, I'm not claiming I have the answer either.. this is something I think about a lot. I'm pretty sure if I could find the answer then I could make a lot more in terms of profits.

 

The Market Predictor

 

I think zdo is making the point (and if i am reading him right) that if you are going to generalise then fine, but comments such as this can be misleading/too general

"What "seems" to be true often isn't the case.. I've tested dozens of systems and most systems that use price stops perform worse"

 

http://www.traderslaboratory.com/forums/money-management/11897-why-do-some-people-not-place.html

 

While this is not a grammar/writing lesson for all of us it is quite important to clarify somethings and often it helps clarify those things for ourselves and helps others as well when writing these things.

Point being - just because you have tested dozens of systems and MOST (but not all 55%??) perform better without stops does not mean much. It actually raises more questions such as - how long did you test them for, what were the characterisitics of the tests that did better with them, without them, do they perform better in bull markets etc.

 

Than again with the distinction between trend and mean reversion systems (the penny in front of the steam roller systems unless you use an exit) - the point is the same - why do you think this, have you proven this (this can never be a fact as their will always be systems disproving it), is there a difference between systems that performs better with an initial stop v a tight intitial stop v a trailing stop v a loose trailing stop. etc etc; How do these systems performs based on when you take a profit......as you need some form of entry and exit from a trade and basically a stop is just one form of exit - think about it ----- a take profit is a stop.

 

Especially after we just discusssed the differences between stops - hard, mental, initial, no stops, tight ones

 

Not to be picky as we are all guilty of it (even zdo with his crazy wild doom and gloom or are they be happy it could be worse threads) however I do see his point and it is important to make the distinctions between specific examples via the overplaying of the recording.....as its probably not played enough maybe.

 

(no dig at anyone - even though I used your quote Predictor - just an observation for us all maybe we should use the words trade exit and entry via a particular method more than just stop)

[MightyMouse 12]

from MightyMouse

Yikes, nothing “system specific” !

For this particular poster, I would request he clarify for you his base method, then look at his posts in that light.

 

 

I was mainly describing a particular type of trading I do which has a low win rate and a high payoff.

 

Other types of trades that I do that are somewhat opposite (high win rate and a small payoff) still have hard stops in place.

 

I read on this tread that there are no absolutes and only probabilities. I suggest that there is at least one absolute: In the long run everything that seems to only be remote, will happen.

 

Trading without a stop with any system invites or invokes your worst nightmare.

 

Yes a stop will take you out of trades that will go on to become winners or the sum of your stops will turn a winning trade into a loser. So what? If you ego is damaged from the exchange, go speak to someone like Rande on the other thread who may help you learn to shrug it off if you can't do it on your own.

 

Getting stopped out and having it go on to be a winner is no different than folding trips in Hold'em when there are 4 spades on the board and then learning that you would have won.

 

Trading without a stop is like playing no fold'em hold'em.

 

One needs to play no limit poker to appreciate this.

[zdo 20]

I hesitate to say anything to avoid diluting any of these excellent recent posts… but, even though I would love to just reify them, we have to move on anyway…

 

Predictor re “I think you're over playing the "system specific" recording” Hell yeh! It would suit me just fine to stop ‘overplaying’ it - if this community as a whole would stop ‘underplaying’ by continuing to spit out so many non system specific ‘truism’ posts with such regularity …

 

BlueHorseShoe re “”would you say that there are no 'universal laws' that are applicable across all strategies?” I used to have more clear ‘Rules of thumb’ about where to begin finding the stop loss zone for a system than I do now. It’s definitely not a single variable ‘problem’.

Predictor stated “Now, in general, mean reversion systems will do better without stops but momentum systems can in some cases benefit from stops” and I know what he’s getting at – but at the same time, the ‘reversion’ systems I use that involve channels/envelopes do much better with loose stop zones based on the angles of the channels, etc. than they do with no stops at all … another generality that’s became less than useless in my world. Some other examples ---

Optimal stop zones for breakout systems really vary all over the board, so with any given system it’s probably best to test the whole universe of stop strategies with each system and include favorable excursion stats in the mix too. re excursion systems, I use three different ones and the stop strategies are widely, wildly disparate… no generalities would ever apply. Swing type systems also end up with huge diversity in optimal stop placements – and vary primarily by how profitable exits are accomplished. PriceAction type stops are a good starting place for testing ‘swing’ systems, but it would be a mistake to restrict one’s research to just that… Good ‘fake’ trend following systems, in my experience, to well with trailing stops… but my entries into these systems are heavily filtered by MarketTyping. True trend systems stop out at the point the trend really is negated for a trader (and reverse), this one is about as close to a ‘law’ as I can get. But, even here, the method for determining trend / entry methods creates variance in whether price based parameters (pivots, SR, etc) or stats should be used for determining if trend has failed… Bottom line point to be made with "it's System Specific" is test test test to find zones for your odds for each system... and use those zones, not points... it's easier and more real to develop expertise working with a zone / range of options than it is with 'tight' limited spots...

 

... the only 'universal law' I can ever think of is never let a position get anywhere close to a catastrophic loss. Saying this from other perspectives = pre define your risk (zones) and accept losses ie live to get different results on another day, etc = ie protect your capital. That’s best accomplished by capitalization, then fine tuned sizing, then finally loss exit zones (or points)

 

 

Getting back to the OP question…

Let’s say I’m rolling into a mid-sized short position in the indexes through today and tomorrow’s sessions (ie centered around today’s close), regardless of whether price is going up or down. I know by the stats what my zone for stops should be, but in the ideal I would be seeing the market scream upwards past where I would be getting stopped out of the initial loads if I use the stats. Why get stopped out if I’m still adding more shorts? So my ‘hard stops’ are deferred and arrayed far above the price action AND I would not let them get hit if I could possibly help it.

My thinking - in this (‘bear’ :tongue in cheek: ) market, the chance of a purple swan event where the price separates up from current levels and ‘never’ oscillates back down to where I could get out at a normal loss are low… it’s a risk I’m willing to take… not comfortable at all with this little campaign, but I do know my odds, how much heat I can stand, and how little the absolute worst result could hurt… an adequate and current example of how those two OP conditions can be applied simultaneously without discrepancy.

[WWWW 10]

First - thanks to everyone who took the time to help me.

I do hear what you are all saying - and grasp most of it – set your stop when your trade entry / logic is invalidated, stops are set as a result of testing, probabilities, the risk level one is willing to absorb, etc.

 

But you may think I do not get it - after you read this.

 

1. While it may not be realistic, as a relative newcomer, I am seeking some black and white rules that take the anxiety out of my trading.

 

2. I may be able to answer my own question (through your wisdom provided thus far) that if i cannot stomach or my account cannot tolerate too much risk, than i simply set my stops tighter knowing that I will be stopped out more often miss out on bigger run-ups and yet avoid larger losses. Maybe this is all that simple.

 

3. But if it is that simple, why are there supposedly credible professional trading tutors out there who prescribe two opposite but absolute stop placement rules?

 

a. - "Exit as soon as the trade goes against you and if the trade does not go in your favor within the first few seconds of the trade on the M5". and the opposite...

 

b. Place your stop at the bottom line of the channel or approx 2 x ATR - which results in a far greater draw-down per trade and far greater risk.

 

Here's my lack of understanding - and I'll give you what I hope is a simple picture using just a sample setup. Please see the attachment.

 

 

- In using a simple price action channel, one would enter at the arrow, when price just passes the upper channel line.

- Using some of the logic I read, a stop theoretically should be placed just below that line as this is where the trade logic has gone wrong.

- After all, if price goes below where I entered, and i would not have entered there in the first place, then that's where my stop goes.

- And if get stopped out there as I would have in my diagram, I missed out on the big run up later.

 

So the "but" is that price may drop and fluctuate a bit - needing "room to develop" in side that channel before it finally picks up and goes profitable. And if in fact I set my stop much farther out, at the bottom of the second channel line, I stand to get stopped out with a much greater loss - at a point only 6 candles further into the trade (the Hammer just before the next red candle).

 

So - at the sake of being redundant - sorry - why not do as some professional trading tutors firmly advise and exit if the trade does not go in my favor within the first few seconds of the trade (on the M5) - trading off a larger loss with more frequent smaller losses? Some professional tutors also say to place a stop at the bottom of the second candle back.

 

To which you can say - you have to back test this to determine if that makes sense.

Is this the real only answer?

 

I apologize if I am just wasting everyone’s time. Maybe I need a vacation. I may be missing the point and not getting anything. I hope you can follow what i am saying. Thank you very much, again, for your time and help.

[zdo 20]

“Hard” stop is now just inside the black on this position, but if I’m in front to the screen should I ever let it get near that ? No. An instance of same, contradiction-'free', principle of the OP question still in action... whether it's to stop a loss or 'keep' a profit, underlying system specific application of this type of 'contradiction' is to protect capital

 

… ideal holding period for this particular position is until (centered around) noonish 2/15 and if I am present and in synch I should be able to cover it low and re- sell higher in the ‘channel’ at least couple times ( and also still stay prepared to sell into it “screaming upward” at some point … that's what I 'wanted' it to do in the first place... how come the market so rarely does what I 'desire' it to do ?? :missy: )

 

Have a great weekend all.