targets and stops on ER2, YM, NQ

Bogey - try an ATR based stop level. I've traded the ER2 for quite a while and started with 1pt stops - but realised based on my results that a stop out was not always " a true failure point for the trade" just a comfort level I had on loss.

I now use ATR(10) on the TF of choice as my stop level.
 
Quote from osorico:

Trading ER2 for 1pt is like scalping. The granularity of the tick combined with the inherent volatility makes using hard stops other than catastrophic stops, for scalping very dangerous.

Similar to trading YM for say 20pts with a 3pt hard stop... you'll learn *very quickly* if the trade is gonna work, which btw, has it's place in the toolbox.

Is there a reason you've have chosen such a small profit target for ER2? Do you ever let the trade run? For that matter, do you ever take less than your target, not including B/E or losses?
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BogE20;
He has got some good points , especially ''Do you ever let your trade run?''???????????????????????????

ER2 is liquid for sure ;
not quite as liquid as NQ or ES,YM.
Glad i started on ER2, makes you appreciate the more liquid stuff like ES, less noise with the latter also.:cool:

Last trend day I thoroughly did due diligence on ;
ES did better, YM did as well[ or better since YM tick size is much smaller than ER2]]

If you still want ER2;
try letting some trend days run [to pay for some scalping losses];
especially on days more likely to turtle trend like first[1st],
and last week of month:cool: Wisdom is profitable to direct.
 
Quote from hypostomus:

Duh. Every consider backtesting your entry rules and optimizing them. That assumes that you have rules.
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Yeah, but not necessary with Jack's RULES.
 
Hi
I watching and paper trading er2 and i would like to learn what market indicator to use to gauge strength of er2. I am watching Tick/Trin and RUT.Does Russell 2000 leg first or ER2 emini?Most of time er2 leg first but Russell 2000 give pattern. So It would be very much helpfully and appreciated any kind of suggestion and help to improve my paper trading. Thx in advance for any help.
Mkp14
 
Quote from bogey20:



The ER2 is volatile I agree, however this is the beauty of it, I also have to say the ES or YM shows the same patterns, trends, HH's, LL's that would put me in the same trades in thouse indexes however potential profits would be smaller, since those indexes are less dynamic, so trading ER2 is a conscious decision, I feel my mistakes are not because of the trading vehicle but something else.
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I was wondering if any of you take into account what ES is doing to make your ER2 calls. I scalp ER2. I would be flying blind if I was not watching the spread between ER2 and ES.

For example if you are looking to get long ER2 and it is the weaker index you probably are going to get stopped out all day. The chart might make it look all pretty, but if ES is up 7 points and ER2 is only up 4.5 points it can be a hard day to buy ER2.

I am not a fan of charts. I do not use them during the trading day. They make trading look to easy!!
 
I actually do use the condition of multiple index futures to determine the strength of any ER2 trades I take. It gives a very comforting feeling when everything is in agreement with each other. As for stop losses, the system that I am working on currently uses a profit target to stop loss ratio of 2:3. It sounds weird to have a profit target less than your stop loss, but it works out for the better. More profit targets are realized and trades are stopped out at the right time. Backtesting wise, it *would* have yielded approximately 26 points this past september. That is taking into consideration slippage and getting the worst possible entry price (but not commision). I'm still tweaking it before I start using actual money with it.

If your strategy can actually point out entries amazingly early or at the end of a retracement for an entry, than yes you can have a profit target to stop loss ration of 3:1. However, I have never heard of a strategy that good. I use to try to do that, than I started trading with my stop losses and profit targets being the same. After going back through the charts, I realized that my profit targets would have been realized more often if they were lower than my stop losses. That is just how my strategy works best.

In summary, your profit targets and stop losses are dependant on your trading strategy (how early it gives the signal, the strength of the signal it gives, etc.). It would ofcourse be great to have a profit target to stop loss ratio of 3:1 and if you ever achieve that with a signficant rate of profit realization, then I congratulate you in advance.
 
<b>Vanquish</b>, go to <b>www.amex.com</b> and click on IWM shares link. Follow that to "holdings" and then "all holdings" for list of major stocks.

Currently long ER 719.00 = stop 719.00 and holding for 725 daily pivot point :>)
 
My recommendation is to take your favorite setups and do a maximum favorable excursion (MFE) and a maximum adverse excursion (MAE) analysis and determine the typical outcomes of your setups for a group of hypothetical or real-time trades. MFE is the largest open profit and MAE is the largest open loss for each trade before exiting. From this analysis you will know the typical outcome for the entry setup and you can then set target and risk points based on the typical market behavior following your entry setup. Now, you can build procedures that will lead to consistent trading and should create consistent results. If you are using inconsistent procedures you will see inconsistent results.
 
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