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Joined Aug 2007
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Status: live to trade another day
|726 Posts
thanks, shr5
here some thoughts to trade management.
lately I'm using a trade management for large trending markets. might not be indicated these days, since we're at the end of a trendcycle where price can go up, down, sw ... as we just see. many corrective movements and no real trend.
which would be the right trade management for this phase? I guess one wants to enter, be be soon and then take some profits quickly. maybe maintain a small position if some trend is picking up.
I'm pretty comfortable with my atr21 as value to define r, so I will continue to use it as an orientation for the r steps.
I have been using it as such:
r=atr21*2=sl
1r=be
2r=2/3tp
1/3 position to run until short term trend is over (closing beyond 21ema)
as I already said, this type of trade management might work for trending markets.
in ranging markets I get a lot of be's or sl's
Here is an option that may work in both, trending and ranging markets:
r=atr21
1r=be
2r=2/3tp
1/3 pos to run
I have taken off some breathing space since r=atr21 and not r=atr21*2
as a result I may get more be's and 2r tp's.
I might get in and out more frequently, since the tight grid ends a trade sooner and offers opportunity to enter another.
also in favor of the tight sl is the actual markethrhythm trading style, since it serves as to trade bounces off ma's. if a bounce wasn't a real one, how much space does the price then need to try again. I'd say if a bounce didn't work, might as well get out because we never know hat comes next.
sometimes it may be suitable to leave the scheme behind and just take profit at resitance or support areas, instead of getting out be.