Help with my trade management, see picture

Quote from hausse:

Alright, see partly what you mean.

But how would you go about finding a pocket of non-randomness and then determining how to exploit it other than through backtesting? Would be kind if you would explain.
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Well, I know this may be heresy, but I'm not a huge fan of backtesting other then to learn if my entries have a high probability of success defined as making 1.5 ES points before getting stopped out at 1.5 points. At that time, I have a no risk trade because I sell half. After that, I'll take what the market gives me and peel off profit as the trade continues in my favor. Maybe some traders can predict what the market will do and get out at the ultimate time, but I'm not one of those blessed souls.

I strongly feel traders should take profits when presented with them and not be concerned about whether they leave some on the table. That's just me. It also goes with my rule to never let a winning trade turn into a loser. I've seen so many decent little moves rebound to entry or lower and I'd get angry as hell for letting the profit slip through my fingers because I wanted to max it out.
 
Quote from blackdog:

Well, I know this may be heresy, but I'm not a huge fan of backtesting other then to learn if my entries have a high probability of success defined as making 1.5 ES points before getting stopped out at 1.5 points. At that time, I have a no risk trade because I sell half. After that, I'll take what the market gives me and peel off profit as the trade continues in my favor. Maybe some traders can predict what the market will do and get out at the ultimate time, but I'm not one of those blessed souls.

I strongly feel traders should take profits when presented with them and not be concerned about whether they leave some on the table. That's just me. It also goes with my rule to never let a winning trade turn into a loser. I've seen so many decent little moves rebound to entry or lower and I'd get angry as hell for letting the profit slip through my fingers because I wanted to max it out.
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I'm still torn about selling half at b/e. It means that 80-90% of my trades will be wash at worst case, and I can still let the other half of the position ride. For example, say I'm trading 4 ym contracts. My initial stop is 30 ticks. Once in profit by 30 ticks, I sell 2 contracts and keep the intial stop on the last 2. Worst case scenario I get stopped out at b/e. I keep the original stop, because many times price will retrace a bit before continuing. After that, I can use support/ resistance levels, trailing stops, targets, etc to take profit. What do you think?
 
Quote from my7tvette:

maybe at the b/e point, rather than taking profit on 1/2, just start to tighten up your stop on half, thus still letting it go if there is more to be had, but making sure you will get some profit on at least part of the position. Just keep gradually tightening your stop on half. if you have made a decent profit on that half when you are taken out, and the position begins to firm up and continues in your favor, use the opposite strategy; just keep widening the stop on the remainder as it moves in your favor. for example, if the position moves one point in your favor, maybe your stop only moves up one-quarter.
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I think I understand what your saying, and it makes lots of sense. Instead of automatically selling half, start to trail price with half the position, thus reducing risk on the way up, while potentially locking in more profit. Correct? Could you give a more specific example in scenario form like I did on the last post? Thanks!!
 
Quote from blackdog:

Well, I know this may be heresy, but I'm not a huge fan of backtesting other then to learn if my entries have a high probability of success defined as making 1.5 ES points before getting stopped out at 1.5 points. At that time, I have a no risk trade because I sell half. After that, I'll take what the market gives me and peel off profit as the trade continues in my favor. Maybe some traders can predict what the market will do and get out at the ultimate time, but I'm not one of those blessed souls.

I strongly feel traders should take profits when presented with them and not be concerned about whether they leave some on the table. That's just me. It also goes with my rule to never let a winning trade turn into a loser. I've seen so many decent little moves rebound to entry or lower and I'd get angry as hell for letting the profit slip through my fingers because I wanted to max it out.
More...

Well put! It's crazy how important money management is, but it seems like not too many people have a solid plan in place. MM can make you... or break you. So, you agree with selling half? I'm also wondering if by measuring the average move of price after a signal, I can figure out the most advantageous points to set profit targets (ie: 50 ticks, 100 ticks, etc), but always leave one for the big picture.
 
Quote from SoCalTrader619:

I'm still torn about selling half at b/e. It means that 80-90% of my trades will be wash at worst case, and I can still let the other half of the position ride. For example, say I'm trading 4 ym contracts. My initial stop is 30 ticks. Once in profit by 30 ticks, I sell 2 contracts and keep the intial stop on the last 2. Worst case scenario I get stopped out at b/e. I keep the original stop, because many times price will retrace a bit before continuing. After that, I can use support/ resistance levels, trailing stops, targets, etc to take profit. What do you think?
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Well, just think about how you would feel if you didn't take off half and watch he price retrace to entry or go lower. If the ratios you are getting result in 80-90% scrath by selling half, then it's clear you should sell the entire position at 30 ticks. Do that twice a day and you're doing better then 90% of the traders out there.
 
Quote from SoCalTrader619:

Well put! It's crazy how important money management is, but it seems like not too many people have a solid plan in place. MM can make you... or break you. So, you agree with selling half? I'm also wondering if by measuring the average move of price after a signal, I can figure out the most advantageous points to set profit targets (ie: 50 ticks, 100 ticks, etc), but always leave one for the big picture.
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I don't know what method you could use to exit at the most advantageous points in a market which is for the most part random; that's why I do it the simple way and not twist my brain with ideas about backtesting, S/R, pivots and what have you. I scale out of ES after selling half as follows: 1/8th at 2 ponts (at this time, I move my stop to entry), 1/8 at 3 points, 1/8 at 5 points, and 1/8 less a 3 point trailing stop. It's not perfect, but what is?
 
Quote from blackdog:

Well, I know this may be heresy, but I'm not a huge fan of backtesting other then to learn if my entries have a high probability of success defined as making 1.5 ES points before getting stopped out at 1.5 points. At that time, I have a no risk trade because I sell half. After that, I'll take what the market gives me and peel off profit as the trade continues in my favor. Maybe some traders can predict what the market will do and get out at the ultimate time, but I'm not one of those blessed souls.

I strongly feel traders should take profits when presented with them and not be concerned about whether they leave some on the table. That's just me. It also goes with my rule to never let a winning trade turn into a loser. I've seen so many decent little moves rebound to entry or lower and I'd get angry as hell for letting the profit slip through my fingers because I wanted to max it out.
More...
Thank you for taking the time to explain. Appreciate it.
 
Hey guys, thanks for all the great responses thus far. I've been doing some thinking recently and I think I might have found a good strategy to reduce risk.

You guys were right that I'm just hurting myself by taking off half the position so early in the trade. It just lessens my profit potential. Additionally, I want to have as many positions as possible when price does make a huge move.

So, I was looking at my signals and noticed that many times price hangs around the entry point, ranges around, then takes off in the intended direction. There is no point for me to take off half my position at 1R when I could adjust stops to b/e and stay on board for the ride with the entire position.

Anyways, I think 1R is a little quick to adjust stops, so I have decided to wait for 2R. I'll give it a go for a little bit and see how it works. For an example, see pic below...

Now time to work on the profit taking strategy to help me maximize gains.
 

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