I think it's much better to trail stop-losses manually, just above the most recently formed swing-high or just above the most recently formed swing-low.
Testing the ALL in and Scale Out or ALL Out Exit Stratgey
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I think it's much better to trail stop-losses manually, just above the most recently formed swing-high or just above the most recently formed swing-low.
That's the million dollar question. Keep testing different scenarios and something should eventually click
Thank you Xela for response,
I like this idea.
Do you have any reference material you can recommend where I can study how to detect swing highs and lows and practice please?
Thank you
Personally, I could never get my position sizing right doing this. I prefer to use volatility based studies as a basis for stop placement.
I agree that volatility-based studies are a good basis.
I sometimes use that for my initial position (depending on the distance of the most recent swing), but then I still trail the stop-loss manually above/below the swings-high/low for the last part of my trade, if it "runs".
I'm trying to "have my cake and eat it".
People vary greatly in the relative proportions to which fear of missing out and fear of potentially losing some profit already made affect them!
I'm not sure you'll need reference material for detecting swings/high-low ... in an uptrend (long position) a swing-low is just a bar that protrudes downards, with one or two higher lows on either side of it, and vice versa with the highs in a downtrend (short position).
Bob Volman covers things like this, I'm pretty sure, in his book Understanding Price Action.
If it helps, I know some (good, successful) traders who drop down one time-frame to monitor swings-high/low just for this purpose on a slightly "busier chart" where they can see a bit more.
This is exactly what I do. I use a multiple of ATR for the initial stop placement but then use a trailing stop as the trade matures. I know many do not like the use of Para SAR but with some tweeking of the settings I have found it works quite well as a trailing stop that tightens as the move runs to let you maximize profits.
Yup ... same here (if it matures!).
I understand the principle and have "played" with it, not too successfully but perhaps just not enough to have discovered ways of making it work for myself.
The other method I've used in the past, which did work quite well, was to use a Donchian channel midline displaced a few bars to the right, and close the trade if the price crossed it. It's a bit more messy and complicated, of course, but I think it's a sound method for some kinds of trading.
Swing highs/lows have different degrees of strength, how many bars to left and right that high/low not been violated, so a good swing low might be the start of an extended move with all the bells and whistles of having 3-4 waves up with retracement waves for entry, some buying on the way down-my favorites and others back on the way up-my least favorite for day trading.
As far as scaling in, whether intraday or medium or long term, prefer all in. In scalping, I have fairly larger number of ways to get in, so some might say I am scaling in, but I am not. Testing shows me that like in ES, I target so many ticks in first so many minutes of day session then after-greatly reduce targets as have different theory of trading "noise" whereas at open-trading the agreeing direction of either attempting to get back to yesterday's close or go the other direction. But cause trading one minute bars, patterns develop quicker than five minute bars, and I am itchy to get out with profit. Three minutes in a trade is like forever to me scalping. But when I trade currencies or crude, I will scale out there depending on how many signals I have in a clustered retracement. Long term, all in cause I hedge, recently lowered amount taken at first target, only reason even have a target is trying to keep account as close to even from losses on the futures and options, if trying to find the extreme before it reverses is long time, having twenty losses in the futures and not have a possible first target will drain equity, hedging helps, but there are times when I lose on both sides, so I am trying to thread water till am in last trade of new direction with 75% left of position and going for min of 75% of range of last nine years. Long term to me is never trailing with stops, kicked myself enough times long ago, taking couple grand to only watch it go 50k.
But again, it has to be left up to your stats, and brainstorm on those, have as many as you can think of doing and perhaps micro stats, lots of what if's, if you notice your mean average of losing trades in a row, have to have fairly large sample size, is say 4 losses in a row, you might test to increase volume by a percentage or target.
As far as scaling in, whether intraday or medium or long term, prefer all in. In scalping, I have fairly larger number of ways to get in, so some might say I am scaling in, but I am not. Testing shows me that like in ES, I target so many ticks in first so many minutes of day session then after-greatly reduce targets as have different theory of trading "noise" whereas at open-trading the agreeing direction of either attempting to get back to yesterday's close or go the other direction. But cause trading one minute bars, patterns develop quicker than five minute bars, and I am itchy to get out with profit. Three minutes in a trade is like forever to me scalping. But when I trade currencies or crude, I will scale out there depending on how many signals I have in a clustered retracement. Long term, all in cause I hedge, recently lowered amount taken at first target, only reason even have a target is trying to keep account as close to even from losses on the futures and options, if trying to find the extreme before it reverses is long time, having twenty losses in the futures and not have a possible first target will drain equity, hedging helps, but there are times when I lose on both sides, so I am trying to thread water till am in last trade of new direction with 75% left of position and going for min of 75% of range of last nine years. Long term to me is never trailing with stops, kicked myself enough times long ago, taking couple grand to only watch it go 50k.
But again, it has to be left up to your stats, and brainstorm on those, have as many as you can think of doing and perhaps micro stats, lots of what if's, if you notice your mean average of losing trades in a row, have to have fairly large sample size, is say 4 losses in a row, you might test to increase volume by a percentage or target.
Thanks everyone for the response and effort. Definitely help me.