If I understand you correctly, you are implying that :
Case 1 = strong trend.
Case 2 = weak trend.
Yes?
Equalized risk and Trailing Stops...WWMDT
- Thread starter dines55
- Start date
If I understand you correctly, you are implying that :
Case 1 = strong trend.
Case 2 = weak trend.
Yes?
Well-known author Jake Bernstein did a few backtests on stops. Generally speaking, he said, wide stops perform better than tight stops, especially on trend-following systems.
And amazingly enough, it seems that trailing stops do not give the trader any significant added advantage (perhaps due to the fact that a lot of good trends will be stopped out prematurely that way).
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Hi Dines, Truth there there is not that much out there, in the retail world, about trade execution-mechanics that provides ready made actionable information. As you have probably seen there is a lot of TA stuff out there and some vague stuff about risk management and ditto for psychology. Probably I would look at the archives here on ET as there is some stuff. A lot of it is well trodden ground that will save you time by not going down those paths. A lot of it was written about the same time as Douglas's book.
Also you see there are a lot of opinions out there too. I would contend it really makes a difference on the entry premises, the instrument's pattern and rhythm, and the overall trading tactics. Some people want to have fewer larger gains, so they will take on risk in a different manner than some people that want many smaller gains. Both have merits, WITHIN their paradigm. You might find one method works for some premises and suck for others and visa versa.
Sorry I cannot be more helpful. Stick with it and do the experiments. One thing I can say, is have a set of measurements of what makes something good or bad and benchmark all your methods against them. Sometimes things look good and turn out bad and visa versa.
Also you see there are a lot of opinions out there too. I would contend it really makes a difference on the entry premises, the instrument's pattern and rhythm, and the overall trading tactics. Some people want to have fewer larger gains, so they will take on risk in a different manner than some people that want many smaller gains. Both have merits, WITHIN their paradigm. You might find one method works for some premises and suck for others and visa versa.
Sorry I cannot be more helpful. Stick with it and do the experiments. One thing I can say, is have a set of measurements of what makes something good or bad and benchmark all your methods against them. Sometimes things look good and turn out bad and visa versa.
So I asked a profitable trader about this and he said in regards to MD's suggestion that you only take profits when the market hands it to you not possible because the market for the most part is random and we dont know when itll make profits available to you. So he works on a 3R all or nothing strategy basis. It either hits hit target intraday/stop or he closes out position at 3:55pm.