Is this seriously what trend traders do?

[bone]

"quit all trades if total unrealised profit reaches 25% of account" etc.

Might I suggest you use a volatility based study like a Bollinger Band, or S/R levels, or Pivots Points, for each position you have on. And set your level slightly worse - make sure you get the fill.

For several really good reasons I have found that using a static percentage level of equity is the least best approach. It's just not as efficient or reliable.

 

[tomorton]

Might I suggest you use a volatility based study like a Bollinger Band, or S/R levels, or Pivots Points, for each position you have on. And set your level slightly worse - make sure you get the fill.

For several really good reasons I have found that using a static percentage level of equity is the least best approach. It's just not as efficient or reliable.

I don't use these markers but I agree - each trade should be treated on its own internal merits. And I do use a type of trailing stop as well as a TA dynamic exit signal. But its been several times now that I've seen my basket of trades just tumbling one by one from a hefty total gain to something much less impressive. I've never seen anyone recommend dumping the whole basket to bank what's on the table - does anyone admit to doing this?

 

[bone]

And I do use a type of trailing stop as well as a TA dynamic exit signal.

Every client of mine who tries a trailing stop regrets it - it gets them out of a winner too early. The TA dynamic signal is just that - too dynamic. Since it's an on-the-run sampling of data, IMO it is too much of a moving target. Again, recent market highs or lows, S/R, pivots, BB's, something more static is best. And be conservative - make sure you get filled.

Again, just my own 2 cents, YMMV. You asked, though.

I'll put it another way - if you were trading a managed account or at a prop firm and you rode +25% all the way back down to +5% there would be hell to pay for sure...

 

[IronFist]

another way - if you were trading a managed account or at a prop firm and you rode +25% all the way back down to +5% there would be hell to pay for sure...

Although if you sold and missed out on 40% I'm sure you'd get screamed at too. That's the problem with all this nonsense. It's like on those fashion design shows, if they prefer what someone did, they're like "he took a chance and it worked, good job" and if they didn't, they're like "he needed to take a chance", but if they hate it, they're like "he took a chance and it didn't work, what was he thinking? " Crazy to judge the results off of the strategy.

 

[tomorton]

Thanks chaps, thoughtful stuff, and perhaps there can be no definitive right answer, just a matter of finding the least bad compromise. It of course has to be something I can sleep peacefully with once I log off at night.

Right now I am applying a new over-riding rule regardless of individual positions' TA and stops etc. - if account goes to +25% in unrealised gains, close everything, bank the money and re-enter as new signals come through.

 

[lcranston]

Thanks chaps, thoughtful stuff, and perhaps there can be no definitive right answer, just a matter of finding the least bad compromise. It of course has to be something I can sleep peacefully with once I log off at night.

Right now I am applying a new over-riding rule regardless of individual positions' TA and stops etc. - if account goes to +25% in unrealised gains, close everything, bank the money and re-enter as new signals come through.

Consider that every instrument has a level that to important traders represents "value". When price drops below that level, these traders see something that's underpriced, even a bargain, and they begin to buy. At the other extreme, these traders see that the instrument is priced dearly, and buyers are thin on the ground, so they begin "taking profits", even exiting their positions entirely (this is what "support" and "resistance" are all about).

If you determine these levels for whatever it is you're trading, you'll recognize the signs that you should at least lighten up or exit entirely. And there's no psychological turmoil involved in exiting as long as you have a plan already laid out for re-entering the trade when price reaches a point where important traders consider it to be a "buy". Important traders do not, for example, abandon AAPL simply because it's had a correction. The ball is always in play, in one form or another.

 

[tomorton]

Consider that every instrument has a level that to important traders represents "value". When price drops below that level, these traders see something that's underpriced, even a bargain, and they begin to buy. At the other extreme, these traders see that the instrument is priced dearly, and buyers are thin on the ground, so they begin "taking profits", even exiting their positions entirely (this is what "support" and "resistance" are all about).

If you determine these levels for whatever it is you're trading, you'll recognize the signs that you should at least lighten up or exit entirely. And there's no psychological turmoil involved in exiting as long as you have a plan already laid out for re-entering the trade when price reaches a point where important traders consider it to be a "buy". Important traders do not, for example, abandon AAPL simply because it's had a correction. The ball is always in play, in one form or another.

I hear much about positioning entries, stops and TP orders according to S/R levels, and this is from traders I really respect. But I find I can only reliably predict what the market has already done......

 

[lcranston]

I hear much about positioning entries, stops and TP orders according to S/R levels, and this is from traders I really respect. But I find I can only reliably predict what the market has already done......

It's not about "S/R levels" as most retail traders use the term today; it's about those levels at which important traders buy and sell. These generally have nothing to do with what retail traders draw on their charts.

As far as knowing what the market has already done, that's the point. At what level do important traders take profits? At what level do important traders re-enter the market? If you've never looked at this, I suggest you do so. At the very least it will enable you to take a bigger chunk of your profits out of the market rather than just sit there like a deer in headlights and wait for price to sink to your stop.

 

[baro-san]

They buy a position, it goes against them, stop out for a tiny loss.

They buy another position, it goes against them, stop out for a tiny loss.

They buy another position, it goes against them, stop out for a tiny loss.

They buy another position, it goes in their favor for a bit, returns to breakeven, stop out for scratch.

They buy another position, it goes beneficially, stop out for a win.

Why not just enter randomly?

I don't think so. Small stops to protect your money will throw you out of the market, not allowing you to catch any trend. They'll also eat your account up, in no time.

If you don't know what you're doing, don't trade!

 

[Grantx]

If you don't know what you're doing, don't trade!

Poor advice. Or were you just trying to say something catchy? No one starts off knowing how to trade so getting repeatedly stopped out on tight stops is an evolutuon everyone goes through.

If you dont know what you are doing then ask questions, read a book, analyse your trades, and generally do everything you can to figure it out.