Stop Losses

[thetitan]

Hi all...was wondering if anybody uses a specific strategy/formula etc for stop losses?

I've pretty much got the intricacies of trading sussed out now, although my main problem is knowing when to cut a losing trade.

It's quite easy to formulate a stop loss but I suppose the hardest thing is putting it into practice - it's so tempting to just say 'I'll wait a few more mins to see if things change'

I'm sure this is quite a common problem, and the only answer is to be absolutely disciplined...but does anybody have any handy tips for maintaining this strict discipline?

eg I've got a pad of paper, i jot down all of the 'do's and dont's' and am supposed to check it all the time to make sure I know what i'm doing.

anybody else?
_________________
Corner vulture

Jimmy Bullard for England Captain. Seriously.

[fairfranco]

titan that's a good question but one that's not easy to answer because it comes a lot down to what your trading.

I know that you trade a lot on the cricket and the tennis and are watching the events live at the time. Both events can easily turn in price quickly at any time and having a stop less set would not be to your advantage as you may end up automatically trading to a loss when you can see that the game is looking like it may turn.

Both games rely a lot on judgement though more so cricket as like a game of Chess no one team is really winning most of the time, a team may hit over double their starting odds and yet still be in a perfectly good position to come back into it. In those cases it is really down to your call on how likely you think that is.

It also depends how much of your bank you are playing with, if you were staking large amounts of your bank then clearly you'd want to be a bit more cautious of the above position.

In the pre race horse trading that I do it is suicide to let it go in play but unless a price is really spiraling out of control I let it go until a minute before the off before taking a loss as it will often come back in a bit even if to a loss.

Thinking about it really pretty much everything would have a different stratergy, football is one which when nothing is happening is fairly easy to take a stop loss if you wanted to. say you back overs or back a team to win/Lay draw and no goals are coming, you could from the start pick a point in which you wish to get out should the goals not come. more difficult is when you are the other way and back unders and an early goal comes, will there be more? do you risk there being more?


sorry if i haven't helped clear your thoughts on this at all but as you can see I dno't think it's an easy thing to put a position on!

[Betfairalfie]

Pre-race horses. I tend to do the same as FF mentioned. Wait until a minute before the off and bail out for a RED screen if I have to. Its a good idea to put your PC clock 2 minutes forward to ensure you never miss the "bail out" time. I minimise risk by playing the short priced end of the market where, in my experience, those scary drifts tend to be less of a problem. There are also trainers I avoid, as they are noted for extreme movement - their horses being heavy steamers or drifters and only they know which it will be.

Football - no thanks

In-play Cricket/tennis - I don't trade this as much as I used to as in-play can be scary, as scary at times as old fashioned punting. But when I do I tend to play the first third/half of an event. Normally trading once only, and then moving on. I like to know there is a reaonable amount of time left to play and for odds that turn against me to turn back in my favour.

I am sure that others do it differently, but one thing I am sure off is trading gives a smoother ride than punting and if it wasn't for trading I'd have myself a proper day job or sell my tips

[thatsa donkey]

Titan,

[thetitan]

cheers for the replies fellas

i actually feel a bit silly having just googled 'stop loss' for the first time - feels like it should have been one of the first things on my 'to do' list.

i was mainly referring to tennis and cricket as FF says, as unlike football, the odds won't really go from 1.5 to 10 with one goal, sending off etc...the price changes in cricket and tennis are relatively gradual and tend to be more conducive to trading.

i read this article, and will need to real many more i feel:

http://www.michaelwalters.com/stoploss.phtml

i think it takes a lot of mental strength to take a stop loss, sounds silly but reading an article like this kinda explains why a stop loss is advantageous...i actually feel more confident now that i understand the benefits more.

eg say your maximum stop loss for any trade is 200pts, but you have no set stop point for winning trades. you could have a series of results like this:

-200
+500
-200
+600

etc etc

as opposed to what i would usually have done:

-500
+500
-500
+600

finally, i think the 'cut losing trades and let winning trades run' mantra has sunk in!!!

sounds so easy when i say it like that...let's hope my trading improves from now on
_________________
Corner vulture

Jimmy Bullard for England Captain. Seriously.