Personally, I hate to use a trailing stop because you're always getting out on a pullback. I would rather try to exit on an extreme move, with a failsafe trail of maybe 50% of open trade profit. Two rules that have helped me over the years are never let a winner go to a loser and decide if you can handle a pullback of the move without exiting. For example, if the ES has moved up 10 points off a breakout and you are long, if you can't handle maybe a 5 point retracement, you'd better start looking for an exit point. Otherwise, the typical pullback will shake you out at a significantly less favorable price.
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How do you manage your trades??
- Thread starter stocon
- Start date
Quote from AAAintheBeltway:
Personally, I hate to use a trailing stop because you're always getting out on a pullback. I would rather try to exit on an extreme move, with a failsafe trail of maybe 50% of open trade profit. Two rules that have helped me over the years are never let a winner go to a loser and decide if you can handle a pullback of the move without exiting. For example, if the ES has moved up 10 points off a breakout and you are long, if you can't handle maybe a 5 point retracement, you'd better start looking for an exit point. Otherwise, the typical pullback will shake you out at a significantly less favorable price.
I understand your thought process with a ten point gain and can see how riding out a retracement might make sense, but what are you doing with a 2 pt. gain? Does your stop immediately go to BE? Never let a profit turn to a loss would indicate that you might. What's going on in the early parts of the trade? In your mind?
TIA Steve
Thx for the link. It's a load, any favorite parts? I see they have the never let a profit turn to a loss, but at the same time they expect 50% winners, tiny losses and 20% big gainers to make your profit. I guess 20% of our trades should just go straight up??
I go one of two ways, depending on how actively I am trading.
If managing passivly, I set an automatic trailing stop equal to the distance to below the previous support (for a long, above previous resistance for a short).
If manageing more actively, I will continue to monitor previous support resistance and adjust - this is probably the better way, but auto is less stress.
If managing passivly, I set an automatic trailing stop equal to the distance to below the previous support (for a long, above previous resistance for a short).
If manageing more actively, I will continue to monitor previous support resistance and adjust - this is probably the better way, but auto is less stress.