I am a rookie and most of the lessons that I have learned the hard way are related to stops.
Some of the lessons learned were the result of my bravado (ignorance).
Some were actually the result of following my rules. (discipline)
Now I am learning to manage fear and desire (psychology)

FIrst live trade ever. 9:30 a.m. opening bell. market moves up. I click BUY (market). 1 contract. ES. Naked. No stops. ...Or so I thought....
In mere seconds I see profits rise to $62.50 then back to $50. I exit. $38.50 profit minus brokers fee.
"WOW! I am going to be good at this" My adrenailine is pupming. Must have cigarrette.
GO outside. Smoke. Come back..."Whats this?? I am in a trade!?!? (didn't realize my platform had preset stops and the stop became a working order after i sold out of my long)
Luckily I am now up $100. Good ,but..."I'm not supposed to be in this trade!" Cancel. EXit. Get me out!
"WOW, I can do this."5 minutes of trading and I am up $100 dollars!
Leave my proverbial desk to go run errands. Return home. 2pm. Yellen speaks. Market rises. Once again, I break my initial rules. CLick BUY. (Market). Now up $185. "Yay!! I am awesome. I am going to quit my job. I should turn off my machine for the day!!(Take what the market gave me)" NOPE. I jumped back in. No set stops. Market reverses with a fury. I am using mental stops. I have a small account. THe pain is too much. I exit down $185 for the day. All this happens in a couple of minutes. "WTF!!"
Lesson for small account trader.....Thats me. Use stops you big dummy. The market has the potential to move faster than you can make descisions!

Lesson 2. Today I will recover my losses. Mmmm HMMMM...
Non farm payroll. 8:30am EST. Market rises sharply. CLick BUY Order is filled a second later but 8 points above intended entry. watch profits flash to $125 and then down to -$200. All of this in seconds. Lesson learned. Don't place market orders immediatley after a news release and USE STOPS! Especaillly with a small account!! Note: While sitting there scratching my head wondering WTF I watched the market move back in to what would have been profitable territory had i stayed in the trade. Salt on the wound.

Now these 2 days were complete rookie mistakes. But the thing is , I knew not to violate these rules. I read them. I took notes on them. THey were in my lists of rules. I had read a lot about managing risk. THe 2% rule. The 5% rule, always use STOPS. Guess all those lessons didn't register. Needed a wallop against my head to realize them.

I began to set my stops at 2%.
Result: Getting stopped out of trades that would have been good trades except for my shallow STOP LOSS.
Lesson Learned: If using shallow stops. Precise entry is crucial. Also in a fast moving market, like those after news releases, a STOP LIMIT can get jumped and a STOP MARKET can result in massive sllipage exceeding ones determined risk.

SO while I have learned lessons about using stops, and the need for precsicion while trading a small account, my new endeavor is getting a hold of my emotions and not being afraid to get back in after being stopped out when my initial idea turns out to be correct. But that is for another thread....

While I submit this for the experienced to laugh and reminence at (but I don't mind because in retro spect I think its funny also! LESSON: Don't be attached to my convictions when trading, accept that sometimes I will be wrong. My preset stop losses will determine this so i don't have to. And be able to laugh at my own follies) I also submit it for the rookies to learn from. Risk management is vital and STOPS are a huge part of RISk management.

Luckily I have not blown up my account...YET!I have been sitting on the sidelines and watching more than not..... I take the occasional scalp. I occasionally win and I occasionally lose. But most importantly I take trades at times when the risk of stop jumping and slippage is low and I always use preset stops. I intend to start a jounal on this forum whence I began to actively trade again so that I can be critiqued, and when warranted, lambasted, and get the occasional pat on the cyber back from the many seasoned and highly intelligent entities on this forum. ( Seriously, SOmetimes I have no idea what they are talking about LOL. Just goes right over my head) But seriously, THis forum is awesome. Reading the members journals and experiences have been invaluable to my learning! Thanks BM's!!

Last rule: THE MARKET WILL ALWAYS BE THERE. IF you don't believe that, your trading account will not.

How often do your limit stops get jumped for those who use them? I was wondering if it's more advantageous to use these types of stops while actively at the computer and manually exit out of the position if it gets jumped to avoid slippage. I'd have to compare the amount of slippage to the amount of stop jumps to see which is better.

Thanks in advance to whoever can answer me.

I don't use stop limits for fear of getting jumped. While i like your idea about manually exiting in the event of a jump I am also hesitant as If the market is moving with enough force to jump my stop then by the time my manual exit was hit I may have already exceeded my risk parameter in excess.

After all that i have read about stop jumps i have been using market stops and as a further note I usally get a tick slippage and sometimes 2. That is with very limited experience as I have been doing more watching and learning as of late. Which is probably why I haven't blown out my account.

I probably should demo more but I have found that my mindset while simulating is so much different than real time.
And throw in the fact that fills and stops are unrealistic in demo render me just watching real time and taking an occaisional shot with a tight stop.

I would be interested to the answer to your question also from someone who has experience with limit stops.
Do you use stops at all? I would have thought that you had experience with limit stops.
MMMMmmmmm BBQ!

Wow this is seasoned with a lot of great lessons. Most traders don't even get this far in their first year lol. If you can take all these lessons to heart and commit it to memory you are well above the pack. The most important thing for a new trader to learn is stops. If one can properly identify where to put their stops the winners will take care of themselves. Good luck my holy delicious pork friend! I hope you love bbq because I love your name.

I've used both in the past but never had it jumped. I'm afraid of a jump as well so I've pretty much always use market aside from experimenting a few times and scale outs. I think a good idea would be to have a limit stop that can identify if price is above or below the order to trigger a program to enter a market stop immediate there after in the event of a jump . This is such a great idea I'm sure someone else has though of it so I won't take credit for it.

What's your favorite BBQ? Do you make your own? We have a BBQ cult on bmt if you haven't noticed lol.



I like Memphis dry rub ribbys