4 reactionary choices on a price movement

[Gazillionaire]

I take the breakeven option. My number one priority is to protect capital. There is no downside to being out of the market.

Yes, just like Buffet rule no. 1. Losing $ is much more detrimental than not making a profit.

 

[murray t turtle]

When traders ask this question, most of the time they have hardly enough time of studying and little to none back testing. Unless you can have all the answers before the questions and done backtesting to show stats, giving a genetic answer is futile in my opinion.

If you had 1000 occurrences of your question, you would have better idea of what you should do.

%%
Good;
lets say that happens 777 times, out of 1444 times .
[1st] first choice is find a better uptrender/LOL.
BUT LONG stormy story short; take profits off a 50/55dma........ it will not let you give back 80% .
I have lost over $80 many times;
but not consistantly/ break even is a loss\loss/loss unless you get free rent /free taxes/ free power\/free dividends. Good question.
On trade if in doubt /sell out, as the NasdaQ market maker$ say; investments have more choices if planned.

 

[Handle123]

Backtesting is another topic and applies to whole trading system. Here I am addressing a basic component of a thought process.
https://www.elitetrader.com/et/threads/backtesting-is-useless.346926/

100% wrong regarding backtesting applications that I do, but I believe over 99% of most traders only do whole trading systems. I break down few hundred patterns of whatever model I working. Programming for years of defining patterns of how far or close together or apart for extreme formations, retracement extremes, up and down trends, news report formations, rallies in up and down trends, retracements on up and down trends, runaway formations, rocketships/plunges disregarding trends then adding in indicators to see which add or subtract an edge, days of the week, ends/beginning of the month. Then comes management of trade, when not to take signals, when to take profit early or later.

Truly better to test individually. Seldom of having 2 traders agree on Head and Shoulders pattern, we all have to figure out what works better for us. 99% of my time is into continue testing,.

This is often why people lose money, they think the backtesting they have done is strong and most likely not even close to being fair assessment of given model.

Gee... that's kinda like Price TA! (Actually, not "kinda like"... it IS Price TA... except "1000 occurrences" aren't required... the correlations are more obvious than that.)

In swing and longer term have to agree with you with exception of automation patterns require some parameters. But scalping/day trading is different, smaller the timeframe, extra patterns and much more stagnation bars, more false patterns on long side, intraday patterns different on futures than stocks, BUT has to do with my backtesting and not what masses do.

 

[Gazillionaire]

100% wrong regarding backtesting applications that I do, but I believe over 99% of most traders only do whole trading systems. I break down few hundred patterns of whatever model I working. Programming for years of defining patterns of how far or close together or apart for extreme formations, retracement extremes, up and down trends, news report formations, rallies in up and down trends, retracements on up and down trends, runaway formations, rocketships/plunges disregarding trends then adding in indicators to see which add or subtract an edge, days of the week, ends/beginning of the month. Then comes management of trade, when not to take signals, when to take profit early or later.
Truly better to test individually. Seldom of having 2 traders agree on Head and Shoulders pattern, we all have to figure out what works better for us. 99% of my time is into continue testing,.
This is often why people lose money, they think the backtesting they have done is strong and most likely not even close to being fair assessment of given model.
In swing and longer term have to agree with you with exception of automation patterns require some parameters. But scalping/day trading is different, smaller the timeframe, extra patterns and much more stagnation bars, more false patterns on long side, intraday patterns different on futures than stocks, BUT has to do with my backtesting and not what masses do.

Great imagination but real traders usually only have time to backtest whole systems just to filter out what does not work. Backtesting may not really tell what actually will work. You need some time to forward test it as well. To breakdown so many components to backtest is a fantasy.

 

[SunTrader]

It's always great to hear someone talk about real or all or most traders and what they do.

 

[Relentless]

It's always great to hear someone talk about real or all or most traders and what they do.

This.

The real funny part is he doesn't even know who he's talking to. If he did - he'd realize he is trying to disagree with one of the few successful players at this game while he likely isn't even close.