I don't usually have time for webinars, it would be nice to continue the topic here. Gives you more time to draft well thought out answers to questions and get feed back if the answer needs clarifying.
I'm more interested in the why than the how.
Do you use Trailing stops, hard stops or both?
- Thread starter KCalhoun
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I don't usually have time for webinars, it would be nice to continue the topic here. Gives you more time to draft well thought out answers to questions and get feed back if the answer needs clarifying.
I'm more interested in the why than the how.
Sure, the main reason why for this as with many strategies is to give myself lots more opportunities to make net profits.... the law of large numbers.
I'm fine doing 30 daytrades in a day making $670 net with 18 small stops and 12 wins, for example... it's a numbers game
That begs the question that if you had a different risk management strategy; ie having only one hard stop in place, would you make more or less money?
Having a trailing stop in place above your hard stop cuts down on your losses but when the trailing stop gets hit and rebounds it also cuts down on your profits.
If your hard stop is 50 cents, why not have it as a 50cent trailing stop?
Is not the "Law of Large Numbers" a double edged sword. You also have more opportunities to take losses.
$670 a day is impressive. But meaningless without knowing the capital involved. Are you making 1/2% on your capital or are you making more or less. Are you doing this every day or is this one of your better days. What about per week or per month?
I know I'm treading on thin ice because what you make is none of my business but you threw the number out there. As I've requested before it would be nice to put it in context.
Hi, no I don't make that daily, that's just for reference re on a good day for me that's my goal is 500-1k for green days and up to 500 in stops on a red day, doing up to a few dozen small daytrades. Overall I'm in the red these past few weeks trying to bottomfish inverses. That's for context re goals for my trading style. I make no profitability nor income claims per compliance regs
Agree, good points... 50c is just an example, it depends on the instrument, eg I use much wider trailing stops on TVIX.
My biggest winning days have been those with multiple entries to scale in with both hard and trailing stops, eg 4+ trades as it goes up.
I use OTO orders and often set up 2-3 before the bell to automate entries and exits
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Amen.
If I'm day trading I take the planned stop and am flat at the end of the day. I never turn a day trade into a swing trade.
I'm primarily a swing trader. I attempt to buy stocks that go up. I take losses quickly.
I'll take a loss on day one if the stock moves against me.
I'll try and move the stop to break even in a day or two.
Once the stop is at break even I tend to give the price more room to move.
I'll continue to hold until the trend line is broken then sell if the stock trades below the low of the bar that breaks the trend line.
If I'm fortunate enough to find a stock that I can hold for a longer period I switch to a weekly chart and use the 30 wk ma as a trigger.
I'm primarily a swing trader. I attempt to buy stocks that go up. I take losses quickly.
I'll take a loss on day one if the stock moves against me.
I'll try and move the stop to break even in a day or two.
Once the stop is at break even I tend to give the price more room to move.
I'll continue to hold until the trend line is broken then sell if the stock trades below the low of the bar that breaks the trend line.
If I'm fortunate enough to find a stock that I can hold for a longer period I switch to a weekly chart and use the 30 wk ma as a trigger.
Recent lessons learned:
Instead I'm using wider initial stops, eg premkt low, then tighten up to trail tight, .20 or less, once it's gone up .5 or more.
- Using trailing stops adjusted manually works better than automatically-adjusted trailing stops (which get shaken out too often).
Instead I'm using wider initial stops, eg premkt low, then tighten up to trail tight, .20 or less, once it's gone up .5 or more.