Mentors and education

[fractalize]

Yes, the one thing I am noticing in my data collection with trailing a winner (or trailing stop) is I do not know when that big $1000 trade is coming using trailing stop to make up for the few losses prior. Like just recently crude oil drop about $2 in 20 minutes, trailing a winner exit method made $1400, while profit target made $300. Of course a bigger sample size is needed, but I understand your point, especially on the confidence building point.

Which further validates my research, and live trading record. The chance of gain is much less critical than the amount of gain. A single winning trade can wash out a multitude of past losers. It sounds like common sense, but normal human nature gravitates toward chance.

I will keep on collecting data with trailing stop/winner method and see how it goes.

If your goal is to have a robust strategy, I think your making a prudent decision.

 

[SimpleMeLike]

Which further validates my research, and live trading record. The chance of gain is much less critical than the amount of gain. A single winning trade can wash out a multitude of past losers. It sounds like common sense, but normal human nature gravitates toward chance.

If your goal is to have a robust strategy, I think your making a prudent decision.

Thank you very much. It helps to know someones agrees with my exit management strategies.

There is disadvantages and advantages with set profit target and trail stop exiting methods. The best thing a trader can do is track the differences

Right now I track trail stop with 4 ema and fixed tick increment. Also combining the two during face pace moves like today.

All in all, what I am learning is I am never going to make all the money, some money will be left on the table.

 

[fractalize]

Right now I track trail stop with 4 ema and fixed tick increment. Also combining the two during face pace moves like today.

Personally, i'd dump the EMA's and just use predefined (symmetrical) horizontal price levels for stop trailing.

 

[SimpleMeLike]

Personally, i'd dump the EMA's and just use predefined (symmetrical) horizontal price levels for stop trailing.

Thanks fractalize,

Are you referring to once waiting for price to break a horizontal support or resistsance level, and then trail a few ticks near that level.

For example, here is a trade I took today on a breakout. I exited about 30.27, using tick increments. as you see exiting with an ema, would have left lots of money.

the green line is a pivot. Are you suggesting test moving the stop a bit above pivot once price breaks it.?

 

[bone]

I've had very mixed results using trailing stops in terms of swing trading.

Specifically, we've found that trailing stops takes us out of winners way too early. The "noise" and natural ebb and flow of price action will do it to you every time.

We will model 30 days of data on-the-run, and set our stop-loss and profit targets according to that modeled trading range. And of course, when we take a profit the market nearly always continues - but that's trading. You take your piece out of the market, then patiently and selectively look for your next opportunity. Perfection is not possible with trading. You take the very best risk vs reward you can find.

YMMV, and I wish everyone good fortune.

Spreads, micro futures, and small blocks of equities - use smaller risk sizing and try to swing trade. IMO for 90 percent of the traders out there you will build account equity faster than intraday scalping.

If nothing else - just look at what you're spending on commissions and exchange fees with the scalping.

Thanks fractalize,

Are you referring to once waiting for price to break a horizontal support or resistsance level, and then trail a few ticks near that level.

For example, here is a trade I took today on a breakout. I exited about 30.27, using tick increments. as you see exiting with an ema, would have left lots of money.

the green line is a pivot. Are you suggesting test moving the stop a bit above pivot once price breaks it.?

View attachment 221909

 

[SimpleMeLike]

I've had very mixed results using trailing stops in terms of swing trading.

Specifically, we've found that trailing stops takes us out of winners way too early. The "noise" and natural ebb and flow of price action will do it to you every time.

We will model 30 days of data on-the-run, and set our stop-loss and profit targets according to that modeled trading range. And of course, when we take a profit the market nearly always continues - but that's trading. You take your piece out of the market, then patiently and selectively look for your next opportunity. Perfection is not possible with trading. You take the very best risk vs reward you can find.

YMMV, and I wish everyone good fortune.

Spreads, micro futures, and small blocks of equities - use smaller risk sizing and try to swing trade. IMO for 90 percent of the traders out there you will build account equity faster than intraday scalping.

If nothing else - just look at what you're spending on commissions and exchange fees with the scalping.

Hello bone,

Thanks for your input. Help understand some definitions here.

Questions:

1. What is your definition of swing trading? In terms of risk vs reward as well.
2. What is your definition of scalping? In terms of risk vs reward.

Here is my options of swing trading intraday (let me know if my understanding makes sense in your IMO of swing trading), for now my max risk per trade is $200

Swing Trade Option 1 : RR=2 Risk $200 to make Reward $400. All in and All out.

Swing Trade Option 2 : RR=2 Risk $200 to make Reward $400. use a trail stop of some sort to $400

Swing Trade Option 3 : Risk $200, close the position at end of the day.

Thank you.

 

[SimpleMeLike]

I've had very mixed results using trailing stops in terms of swing trading.

We will model 30 days of data on-the-run, and set our stop-loss and profit targets according to that modeled trading range.

Hello bone,

When you set your stop loss and profit target, you do not break even, correct? Stay in trade until profit target or stop loss is hit.

 

[SimpleMeLike]

You take the very best risk vs reward you can find.

Specifically, we've found that trailing stops takes us out of winners way too early.

Bone,

Was this testing trailing stops on the way to a predefined profit target? Or just trailing stop trying to gain as much profit as possible?

Thanks

 

[bone]

No, this is real world client experience using trailing stops. Having a predefined profit target didn't help, because the trailing stop always took you out first. We set our profit target and our stop-level at the time of trade entry. We determine those levels using our trading system and 30 days of on-the-run modeled trading range.

We take a loss in one of two ways: 1) you hit your stop-loss level, or 2) the proprietary indicator package reverses. In the case for 2), the factors that led you to take the trade entry initially are no longer relevant, so you're out.

Bone,

Was this testing trailing stops on the way to a predefined profit target? Or just trailing stop trying to gain as much profit as possible?

Thanks

 

[bone]

The last couple weeks have been extraordinary - so generalizations don't help for very recent history. So please don't read anything more into this than providing a bit of color.

Generally speaking - if you're scalping, you're taking many trades during the course of the trading session. Your profit targets and stop loss levels are relatively small. You are working with tic data, one or two or five minute data, watching the order book DOM very carefully... that type of thing. Execution slippage and costs like commissions and exchange fees can be considerable. Many scalpers find out that they require a very high performance front end (like TT) and an expensive ECN (fiber). They will typically use a FCM with colocated servers.

Generally speaking - if you're swing trading, you are modeling longer term data... hourly, daily, weekly. I've seen swing traders take five trades in a week or five trades in a month - very trader personality dependent. Swing traders are very patient and very selective. Swing traders target much larger chunks of trading range than a scalper. That's why I suggest swing trading intermarket futures spreads, micro futures contracts, or small blocks of equity shares - because you are risking larger chunks of trading range. Swing traders will typically try to join freshly emergent trends that they've confirmed or they'll fade market exhaustion where price action on light volume tells them something; that type of thing - point being, the types of trade entries that swing traders look for will have to be a very favorable risk vs. reward scenario that they have a high confidence level in.

Generally speaking - if you ever wanted to trade OPM, you'll be able to utilize a much greater amount of capital swing trading than you ever could scalping.

YMMV, just my 2 cents. Good hunting everybody !

Hello bone,

Thanks for your input. Help understand some definitions here.

Questions:

1. What is your definition of swing trading? In terms of risk vs reward as well.
2. What is your definition of scalping? In terms of risk vs reward.

Here is my options of swing trading intraday (let me know if my understanding makes sense in your IMO of swing trading), for now my max risk per trade is $200

Swing Trade Option 1 : RR=2 Risk $200 to make Reward $400. All in and All out.

Swing Trade Option 2 : RR=2 Risk $200 to make Reward $400. use a trail stop of some sort to $400

Swing Trade Option 3 : Risk $200, close the position at end of the day.

Thank you.