Stop-loss: Trail or not?

bone said:
YMMV, but when my clients use a trailing stop, they get taken out WAY too early. Instant regret. So I emphatically discourage trailing stops and instead teach hard profit targets based upon a targeting system utilizing on-the-run modeled historical trading range. And we stay with the trade until either the target gets hit or the indicator package flips. VERY Good.

The problem with trailing stops is that you can’t place them within “normal” trading range parameters. To put it another way - “normal” trading noise and the back and forth market action between buyers and sellers are a great danger to trailing stops. And nothing feels worse than taking $100 out of a trade that’s worth $500 a short time later.

I wish everyone good fortune !
More...
bone,

Good post.

I can respect and understand you reasoning with this as well. At times, I want to use a profit target and let the trade go to that target and just sit back wait.

But the problem with hard profit targets is knowing where to take profits and most traders do not know this or feel comfortable waiting for it to hit.
 
Think it depends on duration of winning trades, if very long term, once it gets to "BE", no touching till reversal. If couple days do 2 lot, one for target and other let ride till time to reverse. Don't have to reverse, but good area to get out. If getting out intraday, targets and wide trailing.
 
Well, we’re swing trading. And there’s a reason for that. Furthermore - we’re trading inter and intra market spreads NOT outright flat price. And there’s a probability based reason for that.

IMHO the only way to “day trade” modern markets without automation and a very high performance ECN is to be very selective and take only a few high percentage shots per day.

If you’ve got a mouse in your hand and you’re staring at an order book all day - you’re better off taking a couple shots with size than trading 200 round turns per session.

The idea is to build account equity.

SimpleMeLike said:
bone,

Good post.

I can respect and understand you reasoning with this as well. At times, I want to use a profit target and let the trade go to that target and just sit back wait.

But the problem with hard profit targets is knowing where to take profits and most traders do not know this or feel comfortable waiting for it to hit.
More...
 
There are two best uses for the micro market: 1. For a modestly capitalized trader to learn how to swing trade, and 2. To test an automated strategy in a live market

Mere mortals are not going to manually scalp 100 round turns per day with a mouse and survive much less build account equity.

You’re competing with Tower and DRW and Jump and Citadel and Peak 6 and Geneva and on and on... Big $$$$ automation, Big $$$$ ECNs, Big $$$$ data mining and algorithms.

Ates said:
I'm a futures trader and i trade e-mini micro ES contracts for now. No doubt that this market is very complicated. That's why most of traders lose money. I realised that I move my stop-loss to BE very quickly. And decided to think what else can I do instead of moving stop-loss to BE?

By moving stop to BE you are only paying commissions. Still a losing trade! However, your probability being stopped out is now higher than the time you executed the trade (especially if you are trading breakouts). I realised that the best thing to do is not to move stop-loss but close half of my position at 1:1 and i'm still in a free trade. Now, my probability being stopped out is less than moving my stop to BE.

I have not tried this a lot but i know my probabilities. You need to trade at least 2 contracts each time.

What do you think about this approach?
More...
 
Overnight said:
Fugedabouddit.
More...

Yeah, if you’re an independent who’s scalping and day trading with a mouse - that is the longest of long shots. Best of luck with that.

And there was a time in my own past when I would trade a few hundred thousand Eurex and LIFFE Round Turns per month. Day trading. Stupid size.
 
You must log in or register to reply here.
Back
Top