Posts Tagged ‘stop loss’

Hello all,

It is summer, holidays and so on… so this blog took things light lately. I felt that before I trade I need to learn more. As I said before I read a great book by Dr. Alexander Elder – ‘Come into my trading room’

It is a great book with many tools and advices. It is really good for beginners as it will save you lots of mistakes. I am trading for a while now and I love it, but reading this book I recognised all the mistakes I did. I wasn’t alone…

In the past I read that stop loss can kill you. Dr. Elder says the opposite. Not using stop loss will kill you. And I think he is right. My point was that no mater which level you enter and no mater which side you choose (buy or sell) the market sooner or later will come back to you.

Dr. Elder says that maybe I am right, but by the time the market comes back you, you account has been wiped completely. It happened to me with RBS that wiped my account and I had to start again after a break thinking what went wrong. This is even more important when using spread betting because you leveraged product so you may loss more than you account.

The system that Dr. Elder offers make a lot of sense. In fact I’ve read it in other places as well. It is quite simple but will protect your account from disasters. Never trade more than 2% of your account and never be exposed more than 6% of your account.

And be strict with yourself. Never say this time is different so I will raise my stake. It is not easy but this will give you the edge.

Hi all,

I am afraid that my plan to take a month off job and focus only on dealing will not go ahead. I am so busy with clients, projects and running a business that i just can’t take one month off. Nice plan though.

I don’t even have much time to check the market on a daily basis. So I have to change my strategy.  So this is what I am going to do for the next trades: Support & Resistance with tight stop loss. The idea is to go with the market. Buy when the FTSE 100 hit a support with 25 points stop loss and sell when the FTSE 100 hit resistance with the same stop loss.

I know that I have said that I don’t like stop loss. And I don’t. But if you don’t have time to follow each tick of the index then you better use them. My plan is quite simple: I will have some losses no doubt, but one winning strike should cover them and create a nice profit.

So here is my order booking:

I will let you know what happen next…

Hi all,

I am not a big fan of stop loss. I think they make you lose money. So I don’t use them. But today I had sometime and I decided to use Worldspread offer of £250 cash back.

I saw the Dax up strongly today and I know that the 4950-4975 is the upper resistance at the moment. So I opened a position to sell the Dax on 4946 with 25 points stop loss – £10 a point.

At one point I was £150 up, but my target was £1000 or 100 points. But an hour later the Dax was strong again and peaked 4978. I was out. 2 hours later it was 4900… and the again it was up to 4975 and down again.

25 points stop loss is a joke. If you really serious about trading and you still want to use stop loss then use 200 points on Index like the Dax. Otherwise you will be out before you know it.

Hi all

I hate stop losses. I had one on Rentokil at 39p the share went down to 37 triggered my stop loss and went all the way up to 44. Dam!

You can see it quite well on the graph. I should stop using stop loss tool. The way I see it, it is most of the time play into the spread betting firms than it really helps you.

From now on if I want to stop, I will do it by clicking on the ‘sell’ button. This wasn’t a good week for me. Sometimes I feel very confident that I can beat the market and sometimes not. This week I felt clueless. It is good indicator to stay out.

I thought to but the Dow today at 7350, but I wasn’t sure it is clever move so I didn’t. By the end of the day I will know if it was a smart move…