Normal
Of course it is and that's what we need to do.Stops that are too tight can also have the same affect, but there is nothing to stop us re-entering the trade. As you are well aware a trending stock can periodically go into a short-term ranging pattern or retracement phase. Consequently this ranging or retracement this activity may trigger the stop.Your backtesting of T/T would have demonstrated this, as there would have been multiple entries and exits on different stocks during the backtesting period. Reduction of this behaviour would require considering the use of wider stops that would decrease the entry aand exit activity, but aware that you have tested this aspect and shown that it has no real affect on potential profitability.There is no reference below to applying risk management to the upside, neither has it been alluded to. The focus is actually on managing downside risk and protecting profits.Profit maximisation is possibly a poor term to use as it implies greed, but couldnt think of another way to express it at the time of writing.I haven't ignore the first part of your post, but will consider it during the day, and provide a response later. I have been trying to be careful in using the term 'stop loss' and possibly confused terminology to a degree in doing so.But, I would still ask the question, why do we need to wait for the market to prove us wrong in any manner or form, before exiting a trade?If we plan our exits appropriately using the information in the chart, from both a price and volume perspective, that enables us to determine that the trend is starting to fail or lose strength exit the trade and subsequently re-enter when conditions change.This is similar to using chart pattern setups for identifying potential trading candidates, we can also use chart pattern analysis for identifying potential exit setups. The tools we use today are far more advanced than those of a number of years ago and it is not that difficult to include more advanced methods, as part of of our trading methodology.cheers,
Of course it is and that's what we need to do.
Stops that are too tight can also have the same affect, but there is nothing to stop us re-entering the trade. As you are well aware a trending stock can periodically go into a short-term ranging pattern or retracement phase. Consequently this ranging or retracement this activity may trigger the stop.
Your backtesting of T/T would have demonstrated this, as there would have been multiple entries and exits on different stocks during the backtesting period. Reduction of this behaviour would require considering the use of wider stops that would decrease the entry aand exit activity, but aware that you have tested this aspect and shown that it has no real affect on potential profitability.
There is no reference below to applying risk management to the upside, neither has it been alluded to. The focus is actually on managing downside risk and protecting profits.
Profit maximisation is possibly a poor term to use as it implies greed, but couldnt think of another way to express it at the time of writing.
I haven't ignore the first part of your post, but will consider it during the day, and provide a response later. I have been trying to be careful in using the term 'stop loss' and possibly confused terminology to a degree in doing so.
But, I would still ask the question, why do we need to wait for the market to prove us wrong in any manner or form, before exiting a trade?
If we plan our exits appropriately using the information in the chart, from both a price and volume perspective, that enables us to determine that the trend is starting to fail or lose strength exit the trade and subsequently re-enter when conditions change.
This is similar to using chart pattern setups for identifying potential trading candidates, we can also use chart pattern analysis for identifying potential exit setups. The tools we use today are far more advanced than those of a number of years ago and it is not that difficult to include more advanced methods, as part of of our trading methodology.
cheers,
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