Scalping Vs. Runners

[Sprout]

Momentum is a key factor to consider when deciding to let a position run abit, nevertheless if I can stay and watch the markets i prefer multiple entries and exits based on pb’s because much more can be made through multiple entries and exits instead of just hanging on to a runner. Here is a chart illustrating both. Of course the way I define runners (in my world of scalping) may be quite different from how you see a runner.

In the range we see momentum as it trades down to the bottom of the range box on a large bear bar closing on its low. The entry is on the next bar 1 tick below the close of that large bear bar. This is a potential runner. Potential IF there is follow through and if the first PB stays pretty much out of the range. On the left in blue is the results (per contract) hanging onto the runner. A single entry and exit. On the right in green is the results (per contract) of multiple entries and exits during a momentum move. This is multiple entries and exits in the direction of the momentum move and entries and exits on pullbacks. I will take the latter any day. However, one has to be there to watch it.

Even if one does not take entries and exits on 2 and 4 (i.e. the pb’s) only does 1, 3, and 5 on the down moves one still makes 960 minus comm on 48 points as opposed to 640 on 32 points a single entry runner.


Another tactic is on down move entries (i.e. 1,3,5) take the entries and exits but on entry 3 double or triple the size of entry 1 and on entry 5 double or triple size of entry 3.

Another tactical approach which i will use but is more often than not highly disdained in the trading world is in momentum moves i will hold the first position and add more positions to the first and second..etc..when the market moves against the first position in the pb’s or moves against my paper profits already made from the first position. That is I will average down on moves against any potential profits I could have locked in. Then I will exit the entire positions accumulated in one wack when it appears the move may be ending. But I generally prefer multiple entries and exits in the momentum move down as i just like locking in profits.

The chart is NQ

View attachment 193016

Garden harvest must have come in, in more ways than one !

 

[Sprout]

Sorry, I don't understand. I thought when you have a runner you are playing with market's money ... You are risking unrealized gains only. The trade already worked out. What am I missing?

woulda, coulda, shoulda, oughta

With finer distinctions comes more opportunities and less doubt caused by the above - one can always re-enter after an early exit.

 

[Turveyd]

If your doing runners, then your SL needs to larger as you'll often get to profit then general chop will at some stage hit your SL costing you $$$'s, why runners don't work for me as I'm not prepared to take that much downside heat.

 

[ElectricSavant]

But then you will need to maintain a higher winrate

Es

If your doing runners, then your SL needs to larger as you'll often get to profit then general chop will at some stage hit your SL costing you $$$'s, why runners don't work for me as I'm not prepared to take that much downside heat.

 

[trade4succes]

Runners, aka taking your biggest amount of risk when you know the least about a trade working out for you and then "peeling off contracts" as the trade goes your way, IS REVERSE POSITION SIZING. It is bad trading math. Don't do it. Either go all-in / all-out or add to a winning trade when you are in a trend (anti-martingale).

Care for explaining that math? I don't see it. It all depends in my opinion unless I am not seeing something you are.

 

[Turveyd]

But then you will need to maintain a higher winrate

Es

Just cause you can't do it with a 10SL on DAX for instance, doesn't mean you can't use a 30SL and Let some run to +90.

Don't try to use a scalpers SL and expect for it not to get hit in short, error I keep making!!

 

[Turveyd]

Care for explaining that math? I don't see it. It all depends in my opinion unless I am not seeing something you are.

I trade off chop, got 2 reversal areas, so I average down frequently, if I only traded the 2nd further out chop range, I'd make less trades and less money.

Downside, when chop range breaks out ofcourse, but doesn't happen that often.

 

[ElectricSavant]

So you prefer an 80% winrate with 30sl Vs. a 30% winrate with 10sl.

Es

Just cause you can't do it with a 10SL on DAX for instance, doesn't mean you can't use a 30SL and Let some run to +90.

Don't try to use a scalpers SL and expect for it not to get hit in short, error I keep making!!

 

[Hooter]

thank you sir. i know what I like. feel free to ignore it

 

[Turveyd]

So you prefer an 80% winrate with 30sl Vs. a 30% winrate with 10sl.

Es

No I prefer a 90% win rate with a 15SL and I gun for anything from 5 - 30 really, rarely get over 30.

Kinda irrelevant without knowing your average profit, but if you treat every trade like it's a runner with a 10SL then 30% win rate is what you'll get if not less.