Swing Trade EXITS...

[Trend Fader]

Banker,

Thanks for the Cigna chart.. although I know in reality most of my trades dont trend that beautifully.

How do you define a swing to trail? I know the stock has to pullback and take out the high in order to qualify as a swing to trail... but do you just look at it visually and make a judgement.. or do you have some type of a min. retracement to qualify as a swing?


--MIKE

 

[jack hershey]

to help us communicate it would be nice if the posters included their trading entities, their trade durations, and their experience level.

Iam trading very high quality equities for 6 to 8 days cycle (46 years at a max capital level) and I trade commodity index futures intraday (10 years at a fixed max level).

My algorithms are capital limited.

I use and exit method based on a tree of indicator signal sequences. My signals come from Volume, price formations, A/D, MACD, and now Stoc. I use seven bar durations for monitoring and trading ( the nominal equities duration is 30 min and the commod is 5 min). All durations are interchangable as the market pace determines the appropriate duration. I monitor the next fastest bar duration to "anticipate on the trading duration defining the market pace at any time.

The tree branching sequence is one where "flaws" come from indicator signals and block branches on a go/no go (binary basis).

I monitor manually using a "screen" for status. For humor I have attached my commodities screen.

 

[Trend Fader]

Just ignore Jack's posts. He makes trading so complicated. At this point his posts are frustrating.

I have been making $ consistently swing trading... as are many others I know.... the simpler the method the better.

A simple exit like trailing a swing low on an intraday basis... or trailing a multiple of ATR ( based on Van Tharp).. are probably some of the simplest and best exits available.

People like Jack.. make trading more complicated than it really should be. He uses methods no one understands.. and thrives off people asking him dozens of questions to clarify his posts.

Jack I have seen too much of your garbage all over ET. You remind me of Russell Crow from " A Beautifull Mind."

The reason I am so hard on Jack... is that he will try to make this excellent going thread.. into another Jack Hershey thread... where he will post tons of nonsense and people start asking him to clarify them to no avail.



--MIKE

 

[jack hershey]

Quote from Trend Fader:

Just ignore Jack's posts. He makes trading so complicated. At this point his posts are frustrating.

I have been making $ consistently swing trading... as are many others I know.... the simpler the method the better.

A simple exit like trailing a swing low on an intraday basis... or trailing a multiple of ATR ( based on Van Tharp).. are probably some of the simplest and best exits available.

People like Jack.. make trading more complicated than it really should be. He uses methods no one understands.. and thrives off people asking him dozens of questions to clarify his posts.

Jack I have seen too much of your garbage all over ET. You remind me of Russell Crow from " A Beautifull Mind."

The reason I am so hard on Jack... is that he will try to make this excellent going thread.. into another Jack Hershey thread... where he will post tons of nonsense and people start asking him to clarify them to no avail.



--MIKE

To eliminate any future problems in this thread, I will gladly not respond. If, possible, would the moderator please remove my post. The orientation of trend fader is what he wants here and that is Kewl with me.

 

[Bankedout]

Quote from Trend Fader:

Banker,

Thanks for the Cigna chart.. although I know in reality most of my trades dont trend that beautifully.

How do you define a swing to trail? I know the stock has to pullback and take out the high in order to qualify as a swing to trail... but do you just look at it visually and make a judgement.. or do you have some type of a min. retracement to qualify as a swing?


--MIKE

I picked Cigna because it was a clear and concise chart to explain what I was talking about. Of course many charts are not as straightforward.

I define a swing on intraday charts. Basically it starts for me with the establishment of trend on the intraday chart. 30 minute charts can work good for looking at trend changes or emerging trends. I attached one of Cigna to this message.

I don't agree that a stock has to pullback and take out the high in order to qualify as a swing to trail. My favorite setups are launched off of sideways trading. Long that would mean an item which swings up, but instead of pulling back consolidates near the swing highs. Opposite for shorts. I like that type of trade because the "not pulling back" usually means that the market is not interested in serious profit taking at that point and the move can easily continue in the previous direction. Also there is usually a clear line of support or resistance to signal an emerging trend (swing). In addition, the sideways consolidation area provides a nice easy location to place an initial stop, which usually ends up close to the entry spot.

Banker

 

[Trend Fader]

Quote from Bankedout:



I picked Cigna because it was a clear and concise chart to explain what I was talking about. Of course many charts are not as straightforward.

I define a swing on intraday charts. Basically it starts for me with the establishment of trend on the intraday chart. 30 minute charts can work good for looking at trend changes or emerging trends. I attached one of Cigna to this message.

I don't agree that a stock has to pullback and take out the high in order to qualify as a swing to trail. My favorite setups are launched off of sideways trading. Long that would mean an item which swings up, but instead of pulling back consolidates near the swing highs. Opposite for shorts. I like that type of trade because the "not pulling back" usually means that the market is not interested in serious profit taking at that point and the move can easily continue in the previous direction. Also there is usually a clear line of support or resistance to signal an emerging trend (swing). In addition, the sideways consolidation area provides a nice easy location to place an initial stop, which usually ends up close to the entry spot.

Banker

OK... thanks for the clarification.. I guess there is a level of discretion that needs to be applied...


--MIKE

 

[Trend Fader]

Quote from MondoTrader:

anybody mention trailing stops yet ? I think they are great. I use discretionary entry and mechanical exit.

What type of mechanical exit do you use?

 

[Bankedout]

Quote from Trend Fader:



OK... thanks for the clarification.. I guess there is a level of discretion that needs to be applied...


--MIKE

You could use Victor Sperandeo's definition of change of trend (1,2,3) if you wanted to. That would make it less discretionary perhaps. That's outlined in "Methods of a Wall Street Master". Or you could use some sort of moving average to define trend for yourself if you wanted to have an indicator telling you when to take action.

When trading stocks I feel it's important to take the swings when they are in the direction of the stock's intermediate term trend as seen on the daily chart. Also it's best to do these trades when the market is heading in the same direction. If you want even higher odds, make sure the industry group is trading in a supportive manner to what you want to do with the stock.

I don't know of any way to make it purely mechanical. Sorry.

Banker

 

[agrau]

Maybe someone has some input for me on an idea I found somewhere else: Using a parabolic trailing stop. As I understand it, you start out with quite a far-away stop and tighten it as the trend/swing matures.

But then, how do you determine the "age" of a trend. Obviously, I could count the periods since entry, but I feel there is something missing. Maybe age/maturity can be a function of periods in trade, momentum, volatility ...

I have played with Parabolic Stop and Reverse, but this (to me) is a difficult beast, as I don't really understand the logic and the parameters. I hope there is something more elegant out there.

What do you think?

Andreas

 

[dougcs]

I use several types of exits/stops:

ATR , Trailing , Breakeven, Stop Loss, Parabolic , Profit target.

A little detail on them:

ATR-I assume you know this one. Exit n ATRs from the trade high/low. N=6 is usually a pretty good place to start.

Trailing stop- This takes a profit. If the price rises x% above the entryprice and then retraces by y%, take the profit. Example: Buy at 50.00, it rises by 5%(trigger point) to 52.50 and then falls back to 51.25 (a 50 % retracement) sell at 51.25. Of course the %s may be optimized.

Breakeven-the idea is to not let a winner turn into a loser. If price rises x% then set an exit at the entryprice.

StopLoss=The classic stop: Get out if the price goes against you by xpoints or y% or z$$ whatever you want it to be.

Profit target-Take a profit when the price goes in your favor by x% or y points or z$.

Parabolic Stop-Use the parabolic method as an exit trigger. The code for this one is usually available. The idea is to tighten the stop point as the length of time in the trade gets longer. I like this one a lot. I have not found it very useful for entries but very good as an exit.

FYI-My code has 6 lines for entries and about 100+ for exits.

Doug S