Logical stop-loss for er2
- Thread starter feb2865
- Start date
Risking 4 points to make 2?
That won't take too long before the ER2 eats away at your account. For every 1 loss, you'll need 2 wins to break-even before commissions. What happens if you lose 2, 3, or 4 trades in a row?
Something I do, as mentioned previously, is use ATR, but with a twist...
I take the maximum ATR average over the last x bars and multiply that by a factor of usually 1.6 for ER2. If result is near some TA level, adjust accordingly. Your x bars and factor are dependent on your timeframe and your r/r. I use x of 3 on 15m and faster charts. If there is going to be price expansion I want to recognize it quickly and if needed adjust.
Any chartware worth using has some method of doing this. Using Ensign its a snap with 2 DYO lines.
Good trading.
I take the maximum ATR average over the last x bars and multiply that by a factor of usually 1.6 for ER2. If result is near some TA level, adjust accordingly. Your x bars and factor are dependent on your timeframe and your r/r. I use x of 3 on 15m and faster charts. If there is going to be price expansion I want to recognize it quickly and if needed adjust.
Any chartware worth using has some method of doing this. Using Ensign its a snap with 2 DYO lines.
Good trading.
thank you guys I am not here to argue on what risk/reward should be used. I assure you I can draw 2 points form er consistently and that's what matters to me. Another thing is that I don't use same amount of contracts all the time. It all depends on market conditions and patterns
As opposed to some traders(of course respectfully) I don't based R/R or even stop-loss based on % of equity rather based or volatility, which should be adjusted depending on market conditions. If you're a trader still on a so- infamous 3:1 R/R ratio, well good luck to you.
I just wanted to know what's an average S/L from er traders outhere based on current market conditions.
I mean, don't want to be rude or anything, you know. Just trying to make myself clear once more
Thanks
As opposed to some traders(of course respectfully) I don't based R/R or even stop-loss based on % of equity rather based or volatility, which should be adjusted depending on market conditions. If you're a trader still on a so- infamous 3:1 R/R ratio, well good luck to you.
I just wanted to know what's an average S/L from er traders outhere based on current market conditions.
I mean, don't want to be rude or anything, you know. Just trying to make myself clear once more
Thanks
Quote from brownsfan019:
Risking 4 points to make 2?
That won't take too long before the ER2 eats away at your account. For every 1 loss, you'll need 2 wins to break-even before commissions. What happens if you lose 2, 3, or 4 trades in a row?
Exactly... 2 of my automated systems have a stop 3 times as large as the profit target. I designed them this way for my psychology. I prefer a minimum of 80% wins so that I will never turn it off after a string of losses. I always crank up the size after a losing day because 9 times out of 10 it absolutely kills it the next day. Its much easier for me to accept losses when I am right more then I am wrong. I understand that in the long run I am sure a system with 50% winners could produce more money but I dont think I could sit with 10 losers in a row and a 10% drawdown. With high % winners its easy to tell if the system is starting to lose its edge rather than waiting until it depletes half of your account. Do what works for you...