The Price Action Journal

Status
Not open for further replies.
Quote from ggoyal:

I have thought about it too. Have say a max 15 pt exit with a half size stop. If you know what you r doing, you should come otu ahead, right?

I don't know why others don't it. well, one reason is because they want the market to decide when it is enough.

Read AHG, he says that you should have a stop at the low of previous 2-3 bars when entering, and after that, if it goes your way, move your stop up everytime to the previous higher high(HH). Thats my understanding. I might be off though. I am still in the process of reading that 1000+ page journal.
More...

Specterx, GGoyal,

Here's my $.02 on stop loss and profit targets. Don't attempt to "cookie cut" these settings for all trades at all times. Price moves seamlessly from Contraction to Expansion and it's critical to gain a sense of this before entering a trade.
What I mean by Contraction is price that moves within a certain price range; usually accompanied by narrow range and inside range price activity. Another note is that price bars are much shorter in length, say 3 to 7 ticks. Imagine the risk of how often you'd be stopped out if a 15 tick profit target isn't accomplished.
Expansion represents price that "breaks out" from those consolidation ranges. Sometimes the break outs are stronger than others. There's usually more volatile price movement (I said usually) when this happens and the price bars are much longer in length (say 8 to sometimes more than 12 ticks; depending on your chart interval and type--I'm referring to a 3Min chart for these purposes).
Another note I'd like to add is that "position sizing" is crucial when moving from Expansion to Contraction and vice versa. There are other elements that could be considered but I won't complicate things by digging in too deeply all at once. But knowing this, you could set your DOM to throw on your stops and profit targets and then quickly drag them into place if/as price moves in your favor.
For example, for ES my first contract has a Stop Loss 6 ticks and a Profit Target of 80 ticks. (If there's a violent swing to the upside or downside, in my favor, I want as much of it as I can get.) I tend to move my stops manually though. But that's my flavor.

All for thought.

Take care,
Tex
 
Quote from ggoyal:

I have thought about it too. Have say a max 15 pt exit with a half size stop. If you know what you r doing, you should come otu ahead, right?

I don't know why others don't it. well, one reason is because they want the market to decide when it is enough.

Read AHG, he says that you should have a stop at the low of previous 2-3 bars when entering, and after that, if it goes your way, move your stop up everytime to the previous higher high(HH). Thats my understanding. I might be off though. I am still in the process of reading that 1000+ page journal.
More...

Yeah, I get the basic idea: move your stop up to resistance and let it fly. In theory it works fantastically on days like today. I just haven't been able to do it in practice, and I think psychologically I'm much better suited to a system with more trades, frequent and relatively small but stable winners, and limited time in the market. And, of course, on non-trending or rangebound days you could take loss after loss with a system that relies on an HL/LH to form before you take profits.

I haven't seen much endorsement on ET of fixed profit targets (unless you're talking about scaling out), so I'm wondering what the more experienced might think of it.
 
Hi Tex,

Thanks for the great commentary. I enjoy your comments and find them of great value.

I'm interested in hearing how you manage trades on days when the market is in a range or contraction? It seems we see more contraction days then expansion days which requires a different set of rules to win.

Thanks,

Floyd


Quote from TXGrillGuy:

Specterx, GGoyal,

Here's my $.02 on stop loss and profit targets. Don't attempt to "cookie cut" these settings for all trades at all times. Price moves seamlessly from Contraction to Expansion and it's critical to gain a sense of this before entering a trade.
What I mean by Contraction is price that moves within a certain price range; usually accompanied by narrow range and inside range price activity. Another note is that price bars are much shorter in length, say 3 to 7 ticks. Imagine the risk of how often you'd be stopped out if a 15 tick profit target isn't accomplished.
Expansion represents price that "breaks out" from those consolidation ranges. Sometimes the break outs are stronger than others. There's usually more volatile price movement (I said usually) when this happens and the price bars are much longer in length (say 8 to sometimes more than 12 ticks; depending on your chart interval and type--I'm referring to a 3Min chart for these purposes).
Another note I'd like to add is that "position sizing" is crucial when moving from Expansion to Contraction and vice versa. There are other elements that could be considered but I won't complicate things by digging in too deeply all at once. But knowing this, you could set your DOM to throw on your stops and profit targets and then quickly drag them into place if/as price moves in your favor.
For example, for ES my first contract has a Stop Loss 6 ticks and a Profit Target of 80 ticks. (If there's a violent swing to the upside or downside, in my favor, I want as much of it as I can get.) I tend to move my stops manually though. But that's my flavor.

All for thought.

Take care,
Tex
More...
 
Quote from TXGrillGuy:

...
But knowing this, you could set your DOM to throw on your stops and profit targets and then quickly drag them into place if/as price moves in your favor.
...
More...

Exactly the mechanics I use. However profit target presets are only used for expected large swing-like (it's all relative) or small scalp-like (again, it's all relative) trades. That group in the middle, which represent AT LEAST 50% of MY daily undertakings are proactively managed for exit... the market PA and in-the-moment dynamic interpretation is what takes me out in those trades.

Will post a chart or two later about todays terrific action.

Osorico [STILL vacationing :) ]
 
Quote from tv92670:

My take on today's ES. I rode most of the wave up, but had a difficult time pulling trigger on way down. I didn't have a feel for the downleg, couldn't find an entry, didn't want to chase and very much wanted to preserve the points I made on the way up.

Where's Susana? I would like to see her take on the market.

Ty
More...

Like you, I saw the short set up, but could not bring myself to pull the trigger. I had some profit locked in already, and after watching this thing go up and up for two straight trading days, I was a little hesitant to get sucked into a bear trap, so I just sat and watched.

I think that's a major hurdle that I need to get over though, because the ability to change gears with the trend is essential. I'll continue to work on it. One thing I have learned is that it pays to be stubborn with the trend, but you also need to be able to recognize when the trend has ended and a new one has started. Not always so easy to do.

If others can share any ideas on this issue, that would be great, as I would certainly like to hear them.
 
Quote from Specterx:

Yeah, I get the basic idea: move your stop up to resistance and let it fly. In theory it works fantastically on days like today. I just haven't been able to do it in practice, and I think psychologically I'm much better suited to a system with more trades, frequent and relatively small but stable winners, and limited time in the market. And, of course, on non-trending or rangebound days you could take loss after loss with a system that relies on an HL/LH to form before you take profits.

I haven't seen much endorsement on ET of fixed profit targets (unless you're talking about scaling out), so I'm wondering what the more experienced might think of it.
More...

Hi, I'm using fixed profit targets most of the time which I find to be more comfortable with. Yes I trade less better then Susana and other people here but I feel that with time I'll learn to improve my exits , also I'm still able to average my 4-6 points every day so nothing to complain about. I usually use a 2PT fixed target (to maintain about 1:1 R/R Ratio), but I raise my stop to BE-1 after it's had moved 6 ticks In my favor. Usually when price moved 5-6 ticks in your favor it will get to 8 ticks but if not you get out for a small lose. If you can maintain at least 70% of success you can do very well.
Another solution I use sometimes is getting half out at 2pts and letting the other half run, usualy with a trailing stop (of 6 ticks) or sometimes I'm looking for other reasong to exit using 1 minute chart and a 10K vol chart.
 
Hi, I'm still around but on vacation so have not traded still. I don't like to examine charts after the fact, I find it pretty unproductive.

Thanks for the nice posts.

Susana
 
Quote from Floyd Roberts:

Hi Tex,

Thanks for the great commentary. I enjoy your comments and find them of great value.

I'm interested in hearing how you manage trades on days when the market is in a range or contraction? It seems we see more contraction days then expansion days which requires a different set of rules to win.

Thanks,

Floyd
More...

Hey there Floyd,
Trading contraction markets was once my kryptonite. I'd go long at the High of the range, short at Low of the range and just couldn't seem to get a feel for it.
:)
But if you're an S/R trader, contraction markets are like icing on the cake. I think of it as Ping-Pong but with the table inverted. If you were to simply fade the Highs and Lows each time they were touched, you'd do great until it doesn't work again...once the market takes on a directional bias.
My trade management for contraction markets:
I trade 1/3 to 1/2 lot sizes in contraction markets. I enter at, slightly below support or slightly above resistance for the fade but with a 4 tick Stop Loss. I leave my Profit Target set for 80 ticks and merely Close the trades manually once price begins to pullback from S/R. I'm not looking to win big in this type of market. However, staying in the game for me is vital.
Now about my 80 tick Profit Target on the first contract while trading contraction markets. I leave it set there because tighter price range consolidations can lead to some rather explosive trend continuations. While trading ER2, I've had it hit a number of times.
Much of what I eyeball as potential Profit Targets is well below the 80 tick region. But it feels good to have my DOM freeze up and then hear the "ca-ching" sound once the target is hit.

Take care,
Tex
 
Status
Not open for further replies.
Back
Top