Stop-loss: Trail or not?

[tomorton]

So does the coin flip. Maybe the only difference is you cut the losers and let the winners ride?

Yes and No. Yes I do cut the losers and also add to the winners and also repeat them as the trend progresses. (no trend, no trade)

But No, in the sense that if I could only see a 50:50 opportunity based on historic performance of a chart feature, I wouldn't enter in the first place.

 

[SimpleMeLike]

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.

Morning bone and thank you,

I appreciate the comments. Very logical and I like the thought of high probability/percentage trades.

I agree, I only look for 1-2 intraday trades per day. Trades are only high probability with trend.

Would you say trading reversals are high percentage trades?

 

[bone]

Would you say trading reversals are high percentage trades?

I will trade any market circumstance provided that my indicator package and rules conditions are satisfied.

 

[CannonTrading_Ilan]

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?

try trading multiples of 2 or more if possible, taking quicker profit on first unit and allowing the second part a chance to be a larger winner. Of course depends on logic, backtesting and much more.

 

[SimpleMeLike]

try trading multiples of 2 or more if possible, taking quicker profit on first unit and allowing the second part a chance to be a larger winner. Of course depends on logic, backtesting and much more.

Good advice,

What is your opinion or advice on if the trader has not advanced yet to 2 contracts, and still stuck on trading 1 contract?

I would like to do the 2 contracts (1 off at fixed target and trail the other), but still trying to get profitable with 1.

 

[CannonTrading_Ilan]

micros?

 

[bone]

Going from one contract to two is the most difficult sizing change in trading. I tell my clients to build account equity up to the point where personal comfort accommodates the bump. Going from 2 to 3 is not nearly so difficult.

Good advice,

What is your opinion or advice on if the trader has not advanced yet to 2 contracts, and still stuck on trading 1 contract?

 

[SimpleMeLike]

Going from one contract to two is the most difficult sizing change in trading. I tell my clients to build account equity up to the point where personal comfort accommodates the bump. Going from 2 to 3 is not nearly so difficult.

Thanks bone,

For me, trading one contract is very challenging.

Why is going from one contract to 2 contract so difficult from your experience?

Thanks

 

[imjohn]

1 to 2 is tough because it's the only time you are compelled to double down.

2 to 3, 3 to 4, 4 to 5, get's easier and easier.

Churning out 500 ticks with 1 ES, then doubling down and hitting a statistically expected 100+ tick losing streak right off the bat with 2 ES, can be a demoralizing experience.

 

[imjohn]

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?

OP, I have two methods. One has fixed stops and targets and the other utilizes a clearly defined trailing exit.

Both do well over the long run, but some periods the fixed stop/target outperforms, and other times the trailing method outperforms. I would be ok running either method alone, and I favor the fixed stop/target. But I can also halve up size into each and run both methods concurrently. This smooths out the overall results a bit, but it's more work and takes more focus to execute.