Thanks much for the thoughtful reply. Including a stop will be quite helpful, but my concern is that the workload not get so onerous that it drives you to stop posting. That would be a real disaster!

So, if you can include a stop, that’s great. But if it’s a hassle, I’m sure we can all live without it, just like we have been doing.

In either case, thanks again for all your good work, it is very much appreciated!

my initial plan was to use no stops at all due to the fact that these hypothetical trades should represent trading performance based on probabilities and odds (including position sizing) alone, but should not represent a ‘real’ trading system. Exits in brackets are those trades were the trade was closed ahead of time (because risk/reward got unfavorable or due to any other reason). On Friday’s session even with the E-MINI S&P 500 trading 1.5% below Thursday’s close, probabilities and odds were still tilt in favor of a better (but no more a higher) close (therefore the trade wasn’t closed ahead of time). It would’ve made sense to not go ‘all in’ at 1085 but to scale into a (small) long position taking a first position at 1085 and the last one when the intraday loss exceeded the maximum loss during since 11/01/2008, but again my initial plan was not to mirror a real trading account.

Altough it’s getting more and more complex but in order to avoid misunderstandings in the future, from today onward I’ll always include a stop as well and allow for scaling in and out of a position in order to mirror a ‘real’ trading account. I hope that helps.

Best,
Frank

Could you please talk a little on how you set stops? Let me start by saying that I fully agree with your statement that stops are an individual matter, because each investor has different goals and different levels of risk tolerance. So I’m not asking how I should set my stops, I’ll figure that out on my own. But, as part of that process, I would like to understand how you set your stops.

For example, of the 5 losing trades you have listed on the Strategy Performance page, it looks like the exits were at 4.5, 4.5, 1, 4, and 8 points away from your entry point, (in the wrong direction, of course). I’m not sure how many of those were actually stopped out, but only 2 of the 5 have the exit in brackets, so I assume those were the only ones that had the stops triggered. They were at 4.5 and 4 points.

So what’s interesting to me is that for those trades it appears you were only willing to tolerate a 4 or 4.5 point loss, but yet this last Friday you had a long position with an entry point of 1085, and in the afternoon, when the ES mini traded as low as 1071.5, you were at that point looking at a loss of 13.5 points per contract, which would have been $27,000 total. That is much more risk than you had tolerated in earlier trades, so I’m trying to understand why that was. Was it because of some of the statistics of the trade setup gave you more confidence this time than in the previous other trades, or something else?

Rest assured that I’m not trying to be critical at all here – I’m just trying to understand your thinking on stops so I can consider whether I want to factor your approach into my own stop-setting model (which I’m sure will be different from yours). Any light you can shed on the subject would be much appreciated.

Thanks.