"The question I am most consistently asked is Where do I put the stop? Therefore, this EBook is about stop placement. Most trading books and articles you read concentrate on entry. This book concentrates on exit. Knowing when to get out of a trade is vastly more important than is getting into a trade." ~ Joe Ross
If you place your stop a certain number of ticks or pips distant from your entry point, or a certain distance from your entry using a percentage basis, you probably are placing your stop in the wrong place. If you place your stop a certain dollar amount from your entry, below "support," above "resistance," or based on a chart pattern, we know you are upside-down in stop placement. Please believe us, there are much better ways! Joe Ross wrote this EBook "Stopped Out" in order to show you four specialized ways for stop placement. Every single one of them is based on reality. Your stops will rarely be where everyone else puts theirs. Your stops will be unique to you, based on your personal risk tolerance, in conjunction with the risk in the market.
One very important thing: the techniques contained in this EBook apply to all markets — stocks, futures, forex, bonds, contracts for difference, spread-betting, and derivatives, regardless of where they are traded, or by which means they are traded. Like everything else we offer, this material is top quality and is profusely illustrated with charts in order to save thousands of words.
Exit stops that make no sense
You don’t need to become angry if you have used a kind of stop placement method that makes no sense, just avoid using it in the future! We demonstrate with charts why nonsensical stops will only get you into trouble.
Famous trading advisories tell traders to use a 25% stop loss. Others tell traders to use a 15% stop loss. Why? We‘ve heard traders say something like the following: "I always place my stop 15 units away from my entry." But why? Other traders say "I will risk $300 on a trade." But really, why $300? Yet other traders place their stops above resistance, or beneath support. Have you ever seen prices drop through support like a steel ball in a vacuum? Haven‘t you ever seen prices shoot up through resistance like a rocket on its way to the moon?
Stop placement must take into consideration the realities of the markets. It also has to take into consideration your financial tolerance for loss. In this book, discover ways to allow the market itself to tell you where to place the stop. More than that, the market itself can give you an amount that fits your financial tolerance for loss.
Sensible exit stops
You will learn about three specialized exit stops which can be used for your initial stop loss as well as for trailing stops. They all take into consideration the dynamics of the markets. You will also be introduced to a stop technique that enables you to stay in a long-term trend much longer than most traders dare stay in.
We'll show you a wonderful and accurate method for stop placement that can be used from as little as a one-minute chart to a monthly chart, and every conceivable time frame in between. You will learn a stop technique that enables you to successfully stay in medium-term trends and swings. It is a truly powerful stop placement method which is fully adjustable to your personal risk tolerance.
A method for staying with a long-term trend
This chapter goes into a method for staying with a long-term trend even during the time of a major retracement. How long? It can be 1 month, 6 months, or up to ten years. How many traders do you know who have ridden a trend for 10 years?
One of the great lessons of trading is that you "can‘t have your cake and eat it, too". If you want to be a long-term trader using this tool, you accept the trade-off that, by keeping you in a trade for a longer time than most traders would normally endure, you give up being able to exit closer to the extreme level of the move that prices make. You learn the lesson of giving up the first and last 10% of a major move, and being happy with the rest of the 80%.
A unique method to optimize taking the available profits
You learn a technique for a fully adjustable 3-parameter study that is used in a unique way - it keeps you in a trend or swing, so that you optimize taking the available profits.
The idea of exiting a winning trade in a timely manner is basic to success. After all, if you can't take the money off the table while it is there, you cannot succeed at trading. However, not all traders have the mental and emotional discipline to exit a trade on time, so this method offers a technically based method for stop placement.
A method that uses volatility to your greatest advantage
This gives a dynamite technique that enables you to adapt your trading style and personal risk tolerance to the volatility in the market. You’ll see how to set things up so that you can find the exact market and time frame in which you should be trading.
There will be no more guessing with this tool, because you will know exactly which time frame to be in. It will even tell when you shouldn’t trade at all. It keeps you out of markets and time frames you should avoid.
You’ll discover the settings Joe uses for this pure volatility indicator, but you are free to choose your own. With this stop placement technique, you will be able to personalize both your risk and your objective for every trade. That’s true! Imagine yourself being able to not only fine-tune your stops, but being able to fine-tune your objectives as well.
A comprehensive stop placement/trade management device - "The proof is in the pudding"
You will discover the most comprehensive stop placement/trade management device you have ever seen. It was created for our own use. Before trading, wouldn't you like to know exactly what your chances of winning?
You learn how to create your very own worksheet with which you can see how your own trading implementations are working. Once you get the feel of the work done to produce the worksheet, your understanding of how to manage risk, stop placement, and objectives will skyrocket.
We give you full exposure to how we use this trade management worksheet to trade 46 real trades in the euro. You will see how he sets up and organizes the necessary data, and then we'll shows you what you should include in yours.
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