Quotations by Marcel Link

Cutting losses, cutting losses, and cutting losses are the three keys to successful trading. [2003] - Marcel Link

You never need to wait to get stopped out. If the trade feels wrong, just exit it. I like to use time stops, where if a trade is not working after 45 minutes, I get out. [2003] - Marcel Link

Stops that are too tight are a surefire method of losing money. The more volatile the market is, the farther away a stop must be for it to be effective. Never place it at or within a whole number, trendline, moving average, high or low of the day or week, or any significant support or resistance level showing on either the time frame you are looking at or a higher one. It is best to place a stop outside these levels—-and not just outside of them but with some breathing space as well. [2003] - Marcel Link

You can use 25 to 33 percent of the margin requirement as a good day trading limit to lose. When I’m day trading, I try not to allow myself to lose more than 25 to 30 percent of the average true range of a stock on any given trade. [2003] - Marcel Link

These are many ways to use technical analysis to place stops. They can be placed outside trendlines, moving averages, channels, support and resistance lines, the low of X bars ago, below a Fibonacci retracement level, or at previous market lows or highs. [2003] - Marcel Link

If it appears that the risk on a trade is too large, the trade is not a high probability one and should be avoided. Don’t worry about missing trades. [2003] - Marcel Link

When trading, one definitely should look at the larger time frames to get a better idea of where to put proper stops. One also can use the smaller time frames to time trades and get out with profits or smaller losses. [2003] - Marcel Link

If using a trend-following system, it’s easy to move a stop along. Every time it broke higher and then made a higher low, one could have raised the stop to the previous low until the trade was stopped out. [2003] - Marcel Link

By placing stops at least 1 standard deviation from the current price you are ensuring that you are not being stopped out by random noise. By placing stops at least 2 standard deviations away you can be sure any stop that is hit is real. [2003] - Marcel Link

Make sure the trade is worth the risk. A trader does better by trading less, only taking trades that have a great setup, even if it means missing some opportunities. [2003] - Marcel Link

The best traders tend to trade only one market or sector and are experts in it. [2003] - Marcel Link

My best trading comes when I have only two or three positions, as I can concentrate better on them. [2003] - Marcel Link

Every day you’ll get one or two situations that look and feel great. Just be patient and wait for them; there is no need to try to beat the market all day long. [2003] - Marcel Link

On day trades I like to find trades with a minimum of a 2:1 or 3:1 potential payoff, the higher the better. On long-term trades I look for at least a 5:1 reward/risk ratio. [2003] - Marcel Link

An example of low probability trading is trying to pick the tops and bottoms in strongly trending markets. Other situations to avoid include buying after a market has made a substantial move and is in overbought territory and buying when the market is at the top of a channel or a resistance level. Buying after it has broken below an upward-sloping trendline is also a poor trade, as this may indicate that the trend has ended. [2003] - Marcel Link

If you feel comfortable with 60-minute charts, you may have a hold time of 3 to 5 days and may want to limit losses to 1 day. If you use a 5-minute time frame, you can have hold times of 45 to 90 minutes while exiting losers after 30 minutes. My typical good day trades last about 90 minutes to 2 hours, and for my longer-term trades I’ll hold for about 3 to 5 days. [2003] - Marcel Link

When you buy a system, it is unlikely that seller is using it as well; usually it is an older system that he doesn’t use anymore. [2003] - Marcel Link

Lower the overall risk per trade to under 2 percent. [2003] - Marcel Link

I don’t recommend ever doubling your size. It is safer to increase size when you are going from three contracts to four or from ten to twelve. [2003] - Marcel Link

The proper way to pyramid is to have the most contracts at the bottom and then, as the trade begins to work, to add fewer and fewer. Thus, if you had started with ten contracts, you’d add seven, and later four, two, and one. [2003] - Marcel Link