After the 1st leg up do you sell or hold?

[tomorton]

Isn't this similar to trailing stops?

Yes, you could use trailing stops.

 

[tomorton]

Yep, that smells like a trailing stop to me. A classic pattern I have tried. It works very well in a strong trend.

The idea is to go in with one extra contract over the original. When target is hit, the second contract gets the BE stop, but the hope is that the second contract goes further. But in a mixed-mode market? It kind of sux due to the retrace stops. Mreh.

To be comfortable with this tactic, within a trend-following strategy, you have to accept that retrace stops don't matter. What I mean is that lost capital is vitally important but lost unrealised gain is not the same thing and is worth exchanging for a chance of excess profits if the trend continues, as trends normally do. The idea is that the parallel trades in a trend never closes until the trend has been potentially fatally weakened.

 

[tfp]

Depends on the market, time of day, and your trade plan...
Here's an example in crude oil this morning. It's a Monday, so I tend to treat each leg as it's own trade. @Robert Morse makes some good points - treat each leg as it's own, and as oneself 'does the setup still make sense?'

CL had a nice leg up on a decent setup. Took profits, pullback offered decent reload for leg 2, we'll see if it has legs to hit profit target #2. On Mondays per this trade plan, Leg 2's are not as compelling with the stats, so I need to adjust expectations accordingly.

And let's not forget, it's a Monday...

 

[murray t turtle]

If you have success trading a system, you might as well stay with it unless it stops working. You can use your free time modeling, researching new systems, i.e., modeling, testing to see if a second leg makes sense or a 60% probability is profitable..... If you can determine a 95% win rate with certainty, you can certainly determine if a 60% win is worth your while with certainty.

%%
Good points, ironchief; IF only bullmarkets uptrends, or bear market downtrends lasted 95% of the time.LOL
I re-tested an indicator , just to make certain; its named ''know sure thing'' LOL.Sure enough it doesnt seem to work 95% of the time. But even better than 95% ;people buy anything in a bull market, mostly. [edit , end of day/+,quote=that was 95%, not 955% , which maybe a bit optimistic, long term LOL