I have been thinking about setting up a test for my profit taking in order to see which style will create more profit over the course of a month.
Here is the test:
Trading off the 4hr charts accross all pairs.
Lot #1 in a placed trade would have a stop of ATR(100 periods)
Lot #1 would have a limit of ATR x2.
Lot #1 stop would be moved to break even at 1x ATR.
Lot #2 would have a stop of ATR(100 periods)
Lot #2 would move the stop every 1x ATR move in the direction of the trade until the stop is hit.
It seems like lot #2 will be more profitable in the long run when the market continues to make a large move. The only down side seems to be when the market hits that 2xATR mark and falls back.
In one hand you have the market hitting a 2:1 goal more easily and in the other you have given up pips in the hope of a larger move.
I would like some opinions on which system you believe to be better. I plan on testing this out for a month unless I get a definitive answer or a way of backtesting it.
I know people will say do half with one method and half with the other. My answer is that I would like to simplify my trading and would like to use one exit stratagy. The question is which one is more profitable in the long run?
Here is the test:
Trading off the 4hr charts accross all pairs.
Lot #1 in a placed trade would have a stop of ATR(100 periods)
Lot #1 would have a limit of ATR x2.
Lot #1 stop would be moved to break even at 1x ATR.
Lot #2 would have a stop of ATR(100 periods)
Lot #2 would move the stop every 1x ATR move in the direction of the trade until the stop is hit.
It seems like lot #2 will be more profitable in the long run when the market continues to make a large move. The only down side seems to be when the market hits that 2xATR mark and falls back.
In one hand you have the market hitting a 2:1 goal more easily and in the other you have given up pips in the hope of a larger move.
I would like some opinions on which system you believe to be better. I plan on testing this out for a month unless I get a definitive answer or a way of backtesting it.
I know people will say do half with one method and half with the other. My answer is that I would like to simplify my trading and would like to use one exit stratagy. The question is which one is more profitable in the long run?