Tight Stops

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I have used a 2.00 point stop in the ES for over 2 years now and that works great for me. There are several times a week that a 1.50 point stop would have taken me out of trades that ended up winners for me. This is the stop I use for my discretionary trades only...some of my automated trades for the ES use a 3.00 point stop but that is a separate subject. With the pulses of buying that you get at times from program trading, I find that a 2.00 point stop has kept me in numerous SHORT trades that would have been stopped out with a 1.50 point stop. Last week alone I think I had three trades that went against my initial position 1.50 points (all SHORT trades) prior to price levels dropping and triggering my profit targets for 75% of my position size (50% off at +1.00 point and 25% off at +1.50 points....I trail stop the remaining 25% of my position). During any given trade week my 2.00 point protective stop is rarely hit and this is due to decent wiggle room for price action and I cover and/or reverse trades when I have a new counter signal to the initial trade.

Another important aspect to a "stop" discussion is WHEN did you get into your trade in relation to the trend or current price action. If your method for trade entry is not very good then your stop placement (how many points away from entry price) really does not have much credibility. With tight range markets your entry into your trade is what you need to be worrying about more so then where your stop is. :)
 
AMT4SWA

Do you use MAE and MFE studies in your research?

Michael B.

P.S. When typing your handle I held the shift key down and this is what I came up with...AMT$SWA


Quote from AMT4SWA:

I have used a 2.00 point stop in the ES for over 2 years now and that works great for me. There are several times a week that a 1.50 point stop would have taken me out of trades that ended up winners for me. This is the stop I use for my discretionary trades only...some of my automated trades for the ES use a 3.00 point stop but that is a separate subject. With the pulses of buying that you get at times from program trading, I find that a 2.00 point stop has kept me in numerous SHORT trades that would have been stopped out with a 1.50 point stop. Last week alone I think I had three trades that went against my initial position 1.50 points (all SHORT trades) prior to price levels dropping and triggering my profit targets for 75% of my position size (50% off at +1.00 point and 25% off at +1.50 points....I trail stop the remaining 25% of my position). During any given trade week my 2.00 point protective stop is rarely hit and this is due to decent wiggle room for price action and I cover and/or reverse trades when I have a new counter signal to the initial trade.

Another important aspect to a "stop" discussion is WHEN did you get into your trade in relation to the trend or current price action. If your method for trade entry is not very good then your stop placement (how many points away from entry price) really does not have much credibility. With tight range markets your entry into your trade is what you need to be worrying about more so then where your stop is. :)
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AMT4SWA,

Do you find that your entries are near program trading often? Interesting. Do you find that program trading is done in stages?

Michael B.

With the pulses of buying that you get at times from program trading, I find that a 2.00 point stop has kept me in numerous SHORT trades that would have been stopped out with a 1.50 point stop.
 
I trade off volume momentum mainly these days, and yes many days you can see the pulses of program buying and selling reflected in the S&P500. I do not use any of the studies you have noted....I have my own way of watching volume momentum. :)

Actually, my new handle should be "ATM4ME" as the last thing I would ever want to do these days is turn a wrench on a 737 in the middle of the night working third shift....NO MORE! :D
 
I dont usually come to ET and have just read this thread from start to finish.

Bryce is no doubt the most arrogant, egotistical, foul mouthed one of the lot of you, but it is also obvious that he actually trades successfully.

I noticed that Lefty had formed the opinion (and probably rightly from his pespective) that Bryce was just another Charlaton.

But then his ego got in the way of accepting that this opinion may be wrong.

We all noticed during the live calls that Lefty suddenly realised prehaps Bryce did trade and there was mutual respect for a while.

And what happened then?
Look over the posts and you can see the though processes clearly, people disturbed and desperately trying to explain away Bryces "luck".
By the next day it was back to flaming him, snug and cosy in the thought that he is a con.

I have a copy of the TTW 2002 edition and have not given it more than a few hours of analysis because his trading style does not suit me.
A word of warning to those looking into Bryces methods. When he says "discretionary trading" on his website he should really just say subjective cause that what his style is.

Lefty says that Bryces trading style seemed incoherant and not organized. That statement is not considering they come from two different sides of the coin. It is obvious that Lefty's style is more objective and his trading plan more defined.

I personally would be much more interested in learning Lefty's trading style as I am left brained and like to have my trading rules defined.
 
I can assure you, if Lefty wrote a book, he would not advertise it in a negative way, such as Wavebator displayed his trading thoughts here for all to see now and in the Future...

Why would anybody be proud of this thread?

Michael B.
 
Baron reinstated me on a promise that I wouldn't flame anyone in future.

But I came back for a reason and that was to clear up some matters I have seen on other threads.

Maybe no one will see this message but it is interesting that the last few pages after I was terminated actually produced some intelligent discussion.

So I guess I am having the last word.

In the past 18 months since this thread was started I have had a lot of programming work completed and it might now explain the methods I use.

My new log on is ttw144 but if you google search wavetrader2004 you will find what I am referring to.

regards to pisspotpete, seems you are the one with the sense of humor.

BBG
 
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