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My Daytrading Method
- Thread starter eminitrader007
- Start date
Quote from Boib:
Have you considered increasing your size so that you could scale out? Sell 1/2 when you panic and the other at target.
If you get to target without panic you can let 1/2 ride
fwiw.
Boib
Yes, I did think about that but to be honest I'd like to be in black before I try to do that.
Range for tomorrow: 1316-1317.
Quote from xxxskier:
I'm curious as to how you set 1321 as your target?
No logical reason. I had noticed in the past that with this strategy, 4-8 pt. profit is possible.
One thing that I've noticed is that, when the current price is within the long-term support and resistance, it makes sense to take 4 pt. profits and when it is above/below the resistance/support a 6 pt. profit is recommended. This holds true for pullbacks only not reversals.
For example the long-term suppport/resistance was 1279--1299. Once the price broke past 1299, we do not have any immediate resistance as of now. So since I was buying pullback, I decided on a 6 pt. profit.
Quote from cnms2:
This is not a good advice because it doubles your risk.
Well it's true that it doubles the risk but the trades that we take are quality trades where the win% is more than 80. So it does make sense to take half the position at a 4 pt. profits and maybe use trailing stop or reduce the stops on the other half.
I have been seriously thinking about this exit method. Exit half at 4pt. profits and move the stop to 2 pts. instead of the original 4 pts. This way even if the market reverses, we'll make 2pts.
What I was saying is that you should calculate your maximum position based on the maximum risk (loss) you're willing to take. If you're already using a position sizing calculated this way, you shouldn't double it as somebody suggested.
Quote from eminitrader007:Quote from cnms2:
This is not a good advice because it doubles your risk.
Well it's true that it doubles the risk but the trades that we take are quality trades where the win% is more than 80. So it does make sense to take half the position at a 4 pt. profits and maybe use trailing stop or reduce the stops on the other half.
I have been seriously thinking about this exit method. Exit half at 4pt. profits and move the stop to 2 pts. instead of the original 4 pts. This way even if the market reverses, we'll make 2pts.
Quote from cnms2:
What I was saying is that you should calculate your maximum position based on the maximum risk (loss) you're willing to take. If you're already using a position sizing calculated this way, you shouldn't double it as somebody suggested
If somebody is trading 2 contracts, exit out of 1 with a 4 pt. profit and reduce the stop to 2 pts. on the second one.
What do you do if you're trading 1 contract only?
FWIW... If I am following your strategy correctly, when a trade works you have by definition bought/sold near the low/high of the day. For one contract, why not take an average daily range and deduct say your stop amount to get a target. Although the market may have only gone against you say two points (meaning for a long you bought two points off the low), deducting the full stop for a target would give you a hopefully conservative and generally achievable level. The average daily range will also better take into account changes in volatility. ATR could be used if you hold overnight.