Comments on: Corey’s Interview with Larry Connors Part 2

By: Gary

Gary — Thu, 22 Oct 2009 08:25:32 +0000

Thanks for part 2 of the Larry Connors interview. Very interesting. I am looking forward to part 3.

Stops hurting performance is an interesting concept. It comes up in various gambling literature and I have tested it on Excel in a craps simulator and found the same thing Mr. Connors did. Even the most extreme stop loss limits the performance – you just can't beat the house by quitting when you have only lost so much. It just doesn't improve the odds.

I love your site. You rock!

By: Gary

Gary — Thu, 22 Oct 2009 03:25:32 +0000

Thanks for part 2 of the Larry Connors interview. Very interesting. I am looking forward to part 3.

I love your site. You rock!

By: Readings on the Radar for Tuesday | HighYields.com

Readings on the Radar for Tuesday | HighYields.com — Wed, 21 Oct 2009 06:41:54 +0000

[...] Interesting interview with Larry [...]

By: Rob L

Rob L — Tue, 20 Oct 2009 21:52:49 +0000

I read all three articles; sounds like we agree. I think it really sums the entire thing up when you say. 'if you had bought and held 100 shares of the DIA when these three test periods started, you would have ended near $5,500'. Run this scan when holding the DIA would lose you money and using a fixed account size. You'll see capital being trapped in these LONG TERM losing trades, which could be used in winning trades to increase your bankroll.

This reminds of when someone first learns about blackjack, 'Everytime I win, I'll reset my bet to $5 and everytime I lose I'll just double my bet.' The ideas are very different, but both ignore fundamental rules about the world we live in.

By: mikevadon

mikevadon — Tue, 20 Oct 2009 20:22:08 +0000

I just found this site and hope to read more in the future from here.

www.mikevadon.blogspot.com

By: Corey Rosenbloom, CMT

Corey Rosenbloom, CMT — Tue, 20 Oct 2009 18:42:57 +0000

Here are at least three posts I've done (not including private research) that address the “stop and target” research:

http://blog.afraidtotrade.com/revisiting-stop-l...

http://blog.afraidtotrade.com/stops-profit-targ...

By: Corey Rosenbloom, CMT

Corey Rosenbloom, CMT — Tue, 20 Oct 2009 18:38:43 +0000

Hey Rob,

It took me a while and various backtesting to see the results. I first learned this concept - wider stops & smaller targets - from Linda Raschke in 2006 and found it almost impossible to believe until I came back and started running test results in TradeStation.

There's a difference between the research and reality - I know that - but run optimization tests with a variation of stops and targets and you'll get the same research Linda, Larry, and I do.

I still use stops - it's how I control risk. I am not a computer - I know the research and that it enters and exits trades using a specific variable. As a discretionary trader, we are looking at much more than one variable of course, and so this affects our trading decisions.

I find it valuable to know the research and then try to work it in as best you can, but in the real world, not using stops can be very devastating indeed.

It's one of the quirks of academics/research vs reality.

By: Rob L

Rob L — Tue, 20 Oct 2009 18:33:42 +0000

Stops hurt performance? It's theoretical mumbo-jumbo like that, that makes me cringe. Seems like one of those things you stamp on the front of a book to make it sell more copies. Sure, stops wouldn't hurt performance if we all had unlimited capital… the odds of actually picking the top of a stock are pretty hard to do, especially when you're buying pullbacks. In reality, where the rest of us trade, we need stops to PROTECT CAPITAL and keep our day/swing/position trades seperate. Probably another reason why the TradingMarkets strategy didn't fit my personality (I sugar coat that well enough?).