written by reader TradeStops Software

by trader69 | June 9, 2016 3:23 am

Does anybody familiar with a software suite named TradeStops have an opinion of it?

Source URL: https://sgumdev.stockgumshoe.com/2016/06/microblog-tradestops-software/


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Travis Johnson, Stock Gumshoe
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I’ve been experimenting with TradeStops for almost a year now, testing how I work with the alerts and how the mechanical buy/sell calls compare with what I would do with my portfolio, given my druthers. I do like the strategy in general as an alternative to a flat trailing stop, since stops based on historic volatility for a particular stock seem more rational to me, but I have a hard time stopping out of companies when I am confident that they are just temporarily dropping because of investor overreaction. Unfortunately, I’m not always correct in that confidence — thus the test. I’ll be writing about this some more over the summer, as I approach a full year of following these test alerts.

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jayneq
jayneq
6 years ago

Travis,

I am still learning the ins and outs of trading set ups and such, and part of what I was reading suggested stop orders may not be the best idea.
The reason was that, “…in 2007, the Nasdaq changed the rules. Stops can trigger at the bid or ask price. So, if that is the case, then what is the point of a stop loss order? Your order could get filled at just about any price!”
In the book,’Short Term Trading Strategies that work by Larry Connors, “…They ran tests to try to determine the optimal stop levels.
Their conclusion?
…no matter where the stop is placed, it hurt performance. The tighter the stop, the worse the performance. Amazingly, even stops as far as 50% away hurt the performance!
He then goes on to say…
“Obviously, market makers, specialists and professional traders know that the stops are sitting there and many times they are gunning for them.”

This is mostly applicable to short-term trading, but the basic rules apply to buy and hold strategies, too, I think.
I have not utilized stop-loss orders yet.
Jayne

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