CL Redux
- Thread starter schizo
- Start date
Damn, I decided to go get lunch at the worst possible moment.
sim
short .16
10 tick stop, moved to be
target .80-ish
:02 stopped out be
Hesitated before whether to short the top of the range, but I thought it was going nowhere and all those shadows in the 5' convinced me we were going to have non-stop chop till at least Pending Home Sales.
sim
short .16
10 tick stop, moved to be
target .80-ish
:02 stopped out be
Hesitated before whether to short the top of the range, but I thought it was going nowhere and all those shadows in the 5' convinced me we were going to have non-stop chop till at least Pending Home Sales.
I did not like that reaction at 86. That looks like a buyer to me. I'm out b/e
Any good book/tool/articles/direction on Trade Management incl position sizing when trading manually.
I have seen that alot of times I have entered near LOD / HOD or a nice beginning of a good swing but my profit target extremely sucks.
Some of my exit points are
when CL (1 min) touches 20 EMA or
trail 1 tick below/above the low of 5 min green/red bar or
touch of 20 EMA ( 5 min ) or
fixed $200 or
move stop to BE or
non supportive PA around pivot and 20 EMA's.
high volume
- Sometimes I feel I should buy 2 cars, 1 exit based on one of the above signal and other leave for more or
- or exit and re enter again ( sounds little easy but choosing the right price to reenter can be difficult with 10 tick stop ).
- or there is no formula its just experience.
Is there a way to test all these possible combinations.
Note: These are NOT automated signals.
I think every successful trader has overcome this.
I have seen that alot of times I have entered near LOD / HOD or a nice beginning of a good swing but my profit target extremely sucks.
Some of my exit points are
when CL (1 min) touches 20 EMA or
trail 1 tick below/above the low of 5 min green/red bar or
touch of 20 EMA ( 5 min ) or
fixed $200 or
move stop to BE or
non supportive PA around pivot and 20 EMA's.
high volume
- Sometimes I feel I should buy 2 cars, 1 exit based on one of the above signal and other leave for more or
- or exit and re enter again ( sounds little easy but choosing the right price to reenter can be difficult with 10 tick stop ).
- or there is no formula its just experience.
Is there a way to test all these possible combinations.
Note: These are NOT automated signals.
I think every successful trader has overcome this.
I added numbers just to make it easier.
1. The 1min is very choppy. If you take entry signals off the 5 min then you need to take exit signals off the 5 min.
2. This is really only a good idea in a strong move, which you won't know is coming. Also, doing this may leave your exits in very bad places. Either CL might come down and take you out (think of a bull/bear trap), or you might be giving up a ton of profits if the current bar is after a very big bar, which leaves your stop way down below. It sounds like you have different conditions for when you use these different criteria, but I don't know if you'll ever know ahead of time when to do this particular exit strategy.
3. You would rather want to watch and see how price reacts around the EMA. Go long above EMA, short below. If you happen to get a strong long signal below the EMA, have a soft target at the EMA, but watch what it does when it gets there. If it seems to hang there, tighten your stop, move to BE, whatever you are comfortable with.
4. I use a fixed $100 stop on all of my trades. It's probably less than optimal, but I don't want to see a drawdown of more than $100 on any one trade. I believe my entries, for the most part, are better than average and that I will not get stopped out when I take good, clean, high probability trades.
5. I think moving to BE is a good idea. If a move doesn't seem to have any steam, then just take the risk off the table and let it ride. You now have a risk free trade. If it takes a breather and then shoots off to the moon, you can move your stop to lock in bigger profits.
6. I don't know what that means.
7. I don't know what that means either.
I could be slightly off as I'm not the best trader in the world. I'm still learning myself.
I know while doing this that there were a few times where I would start to go into detail, but then would think "well, you probably wouldn't do it for that one." So I think the best option would be to really point out your trades where each one of these criteria is used. I can think of a couple ways that price could act that would make some of these rules really bad ideas, so I think some clarification is needed. It's much easier to know what you mean through seeing real examples.
It's an imperfect science as you're dealing with the chaos of many market participants in many time frames trading for different reasons.
Two things that work quite well more often than not (therefore providing an edge over time):
In a trend, target a new high or low, the size of which is often influenced by previous S/R zones. For example, say you shorted @ 86.54 yesterday shortly before noon eastern time after price put in a series of lower highs and lower lows off a failure to test the overnight high. You want to see previous support of 86.46 break with conviction. It does. Next stop is 86.35 and price tries to hold just above it for a moment and breaks down to test the overnight low. There's only 6 ticks of airspace from the overnight low to the next support level of 86.15, so chances are price will not break 86.21 too hard and if the breakout fails, you may want to take profits on the trade there, or at least lock in something in case of a strong bounce.
In a wide range or a trending channel (stair step trend with fairly deep pullbacks), you can enter at the range/channel extremes and target the other extreme. If trading more than 1 lot, you can take half off at the other extreme and hold one for a possible breakout if the range or channel has been in play for quite a while. Or you can enter on pullbacks in the direction of the trend in the case of a trending channel and target a higher high or lower low.
This subject is discussed in small sections of many investment books in less than rigorous terms. Some years ago Ralph Vince wrote a couple of books which deal with this subject very intensively:
Portfolio Management Formulas : Mathematical Trading Methods for the Futures, Options, and Stock Markets
The Mathematics of Money Management: Risk Analysis Techniques for Traders
Within these volumes Vince presents his concept of "optimal f" (fixed fractional trading). To gather any idea of your "optimal f" you need a lot of data points (ie trades). I own the second one above and have yet to purchase the first volume, but I do believe both have a place in any serious traders library. Fair warning - These books read like difficult college textbooks.
The most reasonable (detail-less) discussion I've read concerning stop placement was from Cynthia Kase. Her approach to stops is more for position traders than day traders (I suspect). She developed a 3 tiered approach based on 1,2, and 3 standard deviations of 2 bar ATR (average true range) corrected for volatility skew. (Unfortunately her book doesn't detail the math behind her indicator.
A basic link to discussion of ATR as a basis for stop placement can be found here: http://www.investopedia.com/articles/trading/06/stopplacement.asp If you follow the trades posted here you will get an idea of what works and what doesn't. If you get time, you should post some of your trades here. Folks here provide great feedback sans judgment
Best of Luck,
FMR
Thanks FirstDegree and NoDoji,
I liked this "imperfect science" so true...
I think I will keep it simple for now ( no mathematical books )
just support/resistance , channel boundaries and watch the power near 20 emas.
I liked this "imperfect science" so true...
I think I will keep it simple for now ( no mathematical books )
just support/resistance , channel boundaries and watch the power near 20 emas.