67 Trades. 2 contracts per trade. $1200 net.

Im new also ---

regarding this:

1) Initial stop -2pts from entry fixed
2) Trade goes +2pts in favor, trail to entry = par
3) Trade goes +3pts in favor, trail to +2pts from entry
4) Trade goes +4pts from entry, Trail to +3pts from entry
5) Trade goes +4.5pts or greater, trail to +4pts
6) Manage occasional bigger gains trailed every +2pts beyond


isnt 2 points a very narrow range for the stop loss-- seems like you would get stopped out alot

I have been toying with a 5 point stop threshold

your thoughts?
 
Quote from mgabriel01:

Im new also ---

regarding this:

1) Initial stop -2pts from entry fixed
2) Trade goes +2pts in favor, trail to entry = par
3) Trade goes +3pts in favor, trail to +2pts from entry
4) Trade goes +4pts from entry, Trail to +3pts from entry
5) Trade goes +4.5pts or greater, trail to +4pts
6) Manage occasional bigger gains trailed every +2pts beyond


isnt 2 points a very narrow range for the stop loss-- seems like you would get stopped out alot

I have been toying with a 5 point stop threshold

your thoughts?
More...

Assuming you're talking about the ES, a 5 point stop is huge to me because I look at volume bars and price levels in combination with how Level II reacts (size of bids/asks + depth), so my entries are down to the tick.

If you're going by pure technical analysis and aiming for pivot trades, then I can see it making sense.
 
<i>"isnt 2 points a very narrow range for the stop loss-- seems like you would get stopped out alot

I have been toying with a 5 point stop threshold..."</i>

Our stops must be relative to our profit objectives. If trading a 10min to 60min chart seeking +10pt or greater profit trades, a -5pt initial stop is perfectly fine.

If instead we expect to exit trades for +2pts ~ +5pts, an initial risk of -5pts will never work.

See the difference?

Stops are based on two factors: what the market will allow, and what our method - approach will tolerate.

Anyone trying to use a two-tick ES initial stop will go broke, period. Normal price action simply won't allow that to hold.

By the same token, a method with sloppy entries will suffer with a -2pt initial stop. An example of that would be MA crossover, MACD crossover, oscillator divergence where entry is open of first bar past the event. Those type of trades are too sloppy for small stops.

My approach is based on breaks and/or pullbacks of specific spots on a chart. If the trade entry is confirmed, -2pt initial stop is fine for trades that have potential. If I force a trade, anticipate a trade or fade the directional bias, a -5pt or even -10pt stop isn't going to make up the difference.

So... initial stops are relative to our normal profit target AND precision of our trade entry method. Gotta have proper balance between profit and loss, working from the profit side of things as our standard of measure.
 
Quote from austinp:

<i>"Now, I take profits too quickly; anywhere from a tick to 1.5 points in a volatile market where I could get much more. So I'm making more money than I ever did, but it's far from optimal.

I basically went from one extreme to another and need to find some kind of balance."</i>

FWIW, I'm evolving from infrequent intraday swings trading to a much more active trade style in the ES specifically myself.

What would your trade summary look like if you did this:

1) Initial stop -2pts from entry fixed
2) Trade goes +2pts in favor, trail to entry = par
3) Trade goes +3pts in favor, trail to +2pts from entry
4) Trade goes +4pts from entry, Trail to +3pts from entry
5) Trade goes +4.5pts or greater, trail to +4pts
6) Manage occasional bigger gains trailed every +2pts beyond

*
More...

When I used to trade the Russell a few years ago, I used trailing stops (in fact, my approach was very, very close to what is being suggested here). If you want to trade crude or bonds/notes, I cannot think of any better approach to locking in intraday profits.

That said, I haven't experienced the same--or even close to the same--success since I moved to the ES fall of 06. The ES is much choppier, partially because of its attractiveness as a delta hedge for those who sell premium for a living.

I use trailing stops with the ES, but allow myself more wiggle room, and tighten around key areas (previous support/resistance, other areas of past confluence, etc.)

A reasonable goal for the ES is 1 point per contract per trade, over the long haul (the last few days skew the data).

Someone suggested here that you may be overtrading. 67 trades is way, way too high for most. It is much easier on the nerves to target bigger swings. Shoot for HANDLES, not ticks.

What you're doing sounds like scalping. I know some here do just that, and I probably could, if I put my mind to it. But I am in this for the long haul, because I like it so much, and am afraid of burn out. Scalping is the quickest way to just that.

Put it this way: the longer you trade, the more experience you will gain, and in this business, experience is the one asset that --guaranteed--becomes more valuable over time. Aim for fewer trades--less than 10, so you can last.

Good luck! :-)
 
Quote from Kovacs:

Assuming you're talking about the ES, a 5 point stop is huge to me because I look at volume bars and price levels in combination with how Level II reacts (size of bids/asks + depth), so my entries are down to the tick.

If you're going by pure technical analysis and aiming for pivot trades, then I can see it making sense.
More...

When it comes to intraday trading, a 5 point stop is almost always too much, imo. But higher volatility means more noise, and more noise requires bigger stops, and bigger stops require smaller positions. Today I used 3 point stops, and sometimes that was too small.
 
Quote from austinp:

<i>"isnt 2 points a very narrow range for the stop loss-- seems like you would get stopped out alot

I have been toying with a 5 point stop threshold..."</i>

Our stops must be relative to our profit objectives. If trading a 10min to 60min chart seeking +10pt or greater profit trades, a -5pt initial stop is perfectly fine.

If instead we expect to exit trades for +2pts ~ +5pts, an initial risk of -5pts will never work.

See the difference?

Stops are based on two factors: what the market will allow, and what our method - approach will tolerate.

Anyone trying to use a two-tick ES initial stop will go broke, period. Normal price action simply won't allow that to hold.

By the same token, a method with sloppy entries will suffer with a -2pt initial stop. An example of that would be MA crossover, MACD crossover, oscillator divergence where entry is open of first bar past the event. Those type of trades are too sloppy for small stops.

My approach is based on breaks and/or pullbacks of specific spots on a chart. If the trade entry is confirmed, -2pt initial stop is fine for trades that have potential. If I force a trade, anticipate a trade or fade the directional bias, a -5pt or even -10pt stop isn't going to make up the difference.

So... initial stops are relative to our normal profit target AND precision of our trade entry method. Gotta have proper balance between profit and loss, working from the profit side of things as our standard of measure.
More...


Thanks - your reasoning makes sense to me

I have been experimenting with bollinger bands - to determine change in direction and trying to confirm it with $TICK >800 or <-800 and $TRIN trending up or trending down to confirm the direction

Today was a very bad day for this experiment because the trend never reversed when the 5 minute price closed below the lower band

so back to the drawing board.....
 
My approach is based on breaks and/or pullbacks of specific spots on a chart. If the trade entry is confirmed, -2pt initial stop is fine for trades that have potential. If I force a trade, anticipate a trade or fade the directional bias, a -5pt or even -10pt stop isn't going to make up the difference.



specific spots being specific chart patterns?
or specific spots being specific price points?

(if you dont want to post your method I understand completely - but hey - if ya dont ask ya dont learn!)
 
Code: 
             SAM
                      Did I ever tell you that I wrote a paper
                      on your father in college?
 
                                  KAFFEE
                      Yeah?
 
                                  SAM
                      He was one of the best trial lawyers ever.
 
                                  KAFFEE
                      Yes he was.
 
                                  SAM
                      And if I were Dawson and Downey and I had
                      a choice between you or your father to
                      represent me in this case, I'd take you
                      any day of the week and twice on Sunday.
                      You should have seen yourself thunder away
                      at Kendrick.
 
                                  KAFFEE
                      Would you put Jessep on the stand?
 
                                  SAM
                      No.
 
                                  KAFFEE
                      You think my father would've?
 
                                  SAM
                      With the evidence we've got?  Not in a
                      million years. But here's the thing-and
                      there's really no way of getting around
                      this--neither Lionel Kaffee nor Sam
                      Weinberg are lead counsel for the defense
                      in the matter of U.S. versus Dawson and
                      Downey.  So there's only one Question what
                      would you do?

So, YOU made 67 trades. 2 contracts per trade. $1200 net. On the ES e-minis. Is that good, bad, or mediocre?
 
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