April 27, 2006
Only Boneheads Pull Their Stops
My Path to 100 R in Profits from Day Trading, by Trader Mike
Mike wrote a great post where he reviews the statistics from his last 543 day trades. Of special note (emphasis mine, ‘R’ means ‘initial risk’):
# I had 288 losing trades for a total of -243.96 R or an average of 0.85 R.
# Due to slippage and commissions a 1R loss may get as large as -1.3R. I had 18 trades that were 1.3 or larger losers for a total of -38.31 R. On 10 of those I pulled my stop.
# The seven biggest losers all got so large because I pulled my stop. They ranged from a 1.88 R loss to a 6.6 R loss.
# I gave away about 16 R just b/c I couldn’t take the small loss and pulled my stop. (No more of that!) The average loss drops from 0.85 to 0.79 (a 7% reduction) without these extra losses from pulling stops.
# The largest loser (6.6 R), on which I pulled my stop, was a long.
April 27th, 2006 at 11:01 am
Trader Mike post on 100R…
Trader Mike has a nice, thorough post about the results of his day trading for the last year or so. I found it very interesting to compare to my own stats since I started day trading at the end of……
April 27th, 2006 at 11:37 am
LMAO! Thanks for the reinforcement
April 27th, 2006 at 12:25 pm
Michael: Read Cialdini’s Power of Persuasion if you haven’t already. (He talks about the power of making public pronouncements to reinforce one’s behavior.)
April 27th, 2006 at 9:26 pm
Hey, I have to tell you guys… I am incredibly new to the whole scene. But I have found this whole concept of stops to be one of the most important tools available to a trader. Not only does it reinforce the emotional detachment, but it keeps your butt out of trouble too!
Thanks to both of you for all you have taught me!
July 24th, 2006 at 1:56 pm
[…] My recent trading results which shows that I have more losing trades than winning trades as well as some pretty good drawdowns. Not to mention the times I was a bonehead and pulled my stops. […]