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Query: Moving Stops to Breakeven

  • #21
  • Aug 17, 2005 1:50am Aug 17, 2005 1:50am
Quoting hun83
Hey Diallist & Lou ,I'm walking in the same shoes as you are....a +5 pip trade I will not turn into a looser,just to watch running a other 20 pips (but I'm already out),but even before you sit down at your computer you have to know what you want to achieve...
I trade 4 pairs(more/less correlated) & bite out 5-15 pips of the market it's all I need(4/5=20),so don't be sorry if you get stopped out...we all have to realise we are not prophets,even my ex country man Soros lost millions ,predicting one year earlier the .com burst.....but hey he is still around.
You James really shocked me with 15 points stop/loss(it's too tight ,brother),I use 30 pips mechanical(will kill my trade)30 pips is enough to me to prove,I'm wrong .....I consider 15 to tight(just on other day I opened at the end of Asian to watch for 2 hours not even hitting my break even & going 15 against me & exit at +3)
This is my 2cents ,guys ....
All the PIP's be with you
Thanks Hun,

Which four pairs do you trade?

On what time frame do you use your 30 pip stop? Hourly? Wouldn't you have to make it large on the Daily?

Is your 5-15 pips per trade or per day?

What do you mean by (4/5=20)?

Hope you don't mind answering. Thank you.

Dial
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  • #22
  • Aug 17, 2005 1:59am Aug 17, 2005 1:59am
Quoting hun83
Hey Diallist & Lou ,I'm walking in the same shoes as you are....a +5 pip trade I will not turn into a looser,just to watch running a other 20 pips (but I'm already out),but even before you sit down at your computer you have to know what you want to achieve...
I trade 4 pairs(more/less correlated) & bite out 5-15 pips of the market it's all I need(4/5=20),so don't be sorry if you get stopped out...we all have to realise we are not prophets,even my ex country man Soros lost millions ,predicting one year earlier the .com burst.....but hey he is still around.
You James really shocked me with 15 points stop/loss(it's too tight ,brother),I use 30 pips mechanical(will kill my trade)30 pips is enough to me to prove,I'm wrong .....I consider 15 to tight(just on other day I opened at the end of Asian to watch for 2 hours not even hitting my break even & going 15 against me & exit at +3)
This is my 2cents ,guys ....
All the PIP's be with you
hey hun, i knew i would raise some eyebrows. the truth is that the way most people trade a 15 or 30 min chart you have to have a 30 to 40 pip stop and i am not saying it cant work that way. i pick my entries with the utmost care and risk 15 to get 10 to 15 trading 30 to 60 mini lots. i sell a portion and then move my stop to breakeven. if i enter a position on an intraday basis with the thought that it could go 30 to 40 pips against me i screwed up, at least the way i pick entries.
  • #23
  • Aug 17, 2005 4:22am Aug 17, 2005 4:22am
[quote=merlin]

Quote
an how is MM more important than exits and entries? you cant win a negative expectancy game no matter what MM you use, and your expectancy is determined by your entries and exits.

you also can goof up a great expectancy system with poor money management.
A chain is only as strong as its weakest link. I've never thought any one of these was more important than the other. Whenver I hear people say that entries are not important and I laugh. It's not cool to say that exits are not important so nobody says that. And it's not cool to minimize money management so nobody does that -- so the only thing left to denigrate in order to sound cool are the entries.

Quote
so we are left with three very important aspects...entries, exits and MM, and to give more or less attention to any of them not prudent imo, even though almost every book you read will make the case that one is more important than the other..

oh oh...i just thought of a good analogy...

which is more important to a human?

oxygen, water, or food?

Oxygen is more important if you are underwater and besides it's hard to eat underwater. Obviously when you are underwater then water is not so important.

Now when you are locked in a giant food locker then water is more important because obviously there is oxygen there. I've never seen a giant food locker with no oxygen in it. Therefore water would be the most important.

But if you were on a planet with no food but lots of water and oxygen but no nitrogen then you are screwed.

FT
  • #24
  • Aug 17, 2005 6:55am Aug 17, 2005 6:55am
Quoting Lou
This is an important thread for ideas on preservation of capital .

diallist, james, fiji, merlin and narafa:

I thought I was being ' a chicken ' by adjusting stops so as to keep losses at a minimum and assure at least some profit. Over the last couple of months I have so many less than +10 pip trades I had begun to wonder if I was falling into a scalping mode. After following this thread, I guess not !

KISS + 10 good - 10 bad since another trade will be along in awhile.


RE: Trading on pullbacks. I think I was absent the day they taught this ! Please a brief explanation on ways to measure the extent of the pullback so as not to be taking a trade against what could amount to a strong reversal.

Hate it when I find knowledge gaps. Love it when I can fill them.

Lou
Adjusing stops at a minimum is not bad, but you have to be sure that you are correct in your timing in 70-80% of the cases.

In order for your trades to work better with the small stops, pullback entries are perfect for your case.

I suggest opening a separate thread for entries in general in which everyone can discuss his entry tehniques.

Thanks,

Nader.
  • #25
  • Aug 17, 2005 9:46am Aug 17, 2005 9:46am
Quoting fijitrader
Whenver I hear people say that entries are not important and I laugh. It's not cool to say that exits are not important so nobody says that. And it's not cool to minimize money management so nobody does that -- so the only thing left to denigrate in order to sound cool are the entries.
FT
I don't give a shit about "sounding cool"!

My post above, referencing Van Tharp, was only made because I found interesting the disparity between his opinion of the relative importance of entries and the differing opinions offered in this thread by the successful traders on this forum.

If I remember correctly, Van Tharp was downplaying the importance of entries as compared to money management when trading a mechanical system. But, it appears to me, when trading a discretionary system, then entries increase in importance.

Merlin has correctly pointed out that all three; entries, exits, and money management, are necessary elements of trading. You have correctly pointed out that the importance of each of these three elements varies with circumstances. (forgive me if I've misunderstood you).

I think the relative importance of entries, compared to exits and money management, is a function of where the trader is focusing in the broad spectrum between, and inclusive of, pure mechanical and pure discretionary systems.

My perception is that James16's trading style is highly, if not totally, discretionary. In that context, I think precision, low risk entries are very important.

Narafa has helpfully suggested that a new thread be started for everyone to share their entry techniques. I think this is an excellent idea and am about to start that thread. Fiji, I hope you and all the other successful traders on this forum will share your experience on that thread.

Diallist (Cool with being un-cool )
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  • #26
  • Aug 17, 2005 10:20am Aug 17, 2005 10:20am
Sorry for this somehow off-topic post. I haven't been paying much attention to the forum for some weeks now, and return to find out that many prople are doing great, read the wonderful james' thread, and keep reading about the MB (MuddBuddha?) system.

Can anyone please direct me to the thread were that system is described?

Thank you very much,
Bonete
  • #27
  • Aug 17, 2005 11:42am Aug 17, 2005 11:42am
Hey Jim, I went back and looked at quit a few of the SAR trades. It looks like you are correct on numerous occasions, but you also miss quite a few really good trades. Is there any way to test if you put on a quarter of your trade with the original system and then add more if it comes back in the 6 to 8 bars? If you want capitol preservation it seems that may be a feasible idea.
Pipmon


Quoting james16
i have an assignement for everyone. based on mb's system go back and look at the crosses where price came back to the 25 or close to it either right after the cross or within 6 to 8 bars. your risk is now substantialy less and if it does go sour you have not lost 40 or 50 pips. a lot of times you will catch 10 or 15 pips on a bounce before going sour so you have a profit instead of a loss. pleeeease dont get me wrong, a lot of people have been having great success trading just the way mb says and hey thats fine. all i am doing is offering a different approach to playing ma cross overs to lower the risk. you are going to miss some big trades doing it this way. what you will notice is that by entering in this manner it allows your stop to be 15 to 20 pips, sometimes less. jim
LETS PLAY HOCKEY!
  • #28
  • Aug 17, 2005 11:50am Aug 17, 2005 11:50am
Quoting pipmonster
Hey Jim, I went back and looked at quit a few of the SAR trades. It looks like you are correct on numerous occasions, but you also miss quite a few really good trades. Is there any way to test if you put on a quarter of your trade with the original system and then add more if it comes back in the 6 to 8 bars? If you want capitol preservation it seems that may be a feasible idea.
Pipmon
yes you are correct but i am willing to give up a few good trades to keep risk as low as possible. i am sure a staggered entry as you describe is a viable option.
  • #29
  • Aug 17, 2005 12:00pm Aug 17, 2005 12:00pm
If you are correct on the system take a look at the eur/usd on a daily basis. Interesting, especially with almost getting to 1.2250. Maybe someone should load up for the run back up.
LETS PLAY HOCKEY!
  • #30
  • Aug 17, 2005 2:47pm Aug 17, 2005 2:47pm
Quoting diallist
I don't give a shit about "sounding cool"!

My post above, referencing Van Tharp, was only made because I found interesting the disparity between his opinion of the relative importance of entries and the differing opinions offered in this thread by the successful traders on this forum.

)
I guess I figured I was using humor in my post. I had not addressed my post to you and didn't figure it would cause you a problem or I'd not have said that. Try not to take my statements too personally it was not directed to you.

FT
  • #31
  • Aug 17, 2005 5:28pm Aug 17, 2005 5:28pm
Quoting fijitrader
I guess I figured I was using humor in my post. I had not addressed my post to you and didn't figure it would cause you a problem or I'd not have said that. Try not to take my statements too personally it was not directed to you.

FT
No problem Fiji, I'm cool.....uh.....uncool.....uh...
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  • #32
  • Aug 17, 2005 6:16pm Aug 17, 2005 6:16pm
Quoting diallist
I don't give a shit about "sounding cool"!
huh?!??

sounding cool is my MAIN objective!!!
Relax and be happy.
  • #33
  • Aug 18, 2005 5:31am Aug 18, 2005 5:31am
Quoting merlin
huh?!??

sounding cool is my MAIN objective!!!
Trading! It's all about psychology isn't it...

FT
  • #34
  • Aug 19, 2005 6:20pm Aug 19, 2005 6:20pm
Quoting diallist
Fiji, you post the most amazing things! Trailing entries? This sounds very interesting, but I don't follow exactly how this would work. I know how much you hate writing long replies, , but would you be willing to expand on this idea for us?

Thanks

Dial
Entries the follow the ma used as S/R in order to catch the pullbacks.

FT
  • #35
  • Aug 19, 2005 8:48pm Aug 19, 2005 8:48pm
Quoting fijitrader
Entries the follow the ma used as S/R in order to catch the pullbacks.

FT
Thanks. But you didn't have to go on and on about it.
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  • #36
  • Aug 20, 2005 5:42am Aug 20, 2005 5:42am
Quoting diallist
Thanks. But you didn't have to go on and on about it.
Well you did ask me to expand on it and I guess I just got carried away. I'll try to be more succinct next time and maybe capture the whole idea in a single line.

FT
  • #37
  • Aug 21, 2005 10:56am Aug 21, 2005 10:56am
Quoting fijitrader
Entries the follow the ma used as S/R in order to catch the pullbacks.

FT
fiji are you saying that if the price breaks the MA, wait for it to come back to the MA before entering?
Relax and be happy.
  • #38
  • Edited 4:28pm Aug 21, 2005 4:23pm | Edited 4:28pm
Quoting merlin
fiji are you saying that if the price breaks the MA, wait for it to come back to the MA before entering?
One simple application would be a scenario where you get a price cross followed by the fast ma cross. Your first confirmation of market direction (most likely supported by a trend filter) is the fast ma crossing the slow ma. That triggers the trailing entry into standby mode. The trailing entry would follow the slow MA along a few pips above the slow ma with a stop of "n" pips. Since most pullbacks that are going to take off tend to retreat to just touch the ma, or just penetrate it a bit, and then bounce, then your trailing entry would stay alive until say, the fast ma ceases it's excursion and heads back towards the slow ma by a certain percentage -- or some other market signal that indicates the probability of a bounce taking off has reduced.

On larger time compressions (4hr and up) you may want to look for a buy signal after a touch or penetration of the slow ma since bounces in these time frames frequently have such a wide margin for error. In fact if a bounce is going to happen on the 4hr it will most likely happen on the 30 min or 1hr first. So while it may be possible to trigger an alert when price retreats to a 4hr ma -- perhaps the entry should be taken on a lower time frame.

Does that make sense?

FT
  • #39
  • Aug 21, 2005 4:33pm Aug 21, 2005 4:33pm
ohhh... i see fiji man. interesting entry technique.

the obvious potential flaw is that you will miss some of the big moves that never pull back. but if this is an intermittent system (as opposed to a SAR system that has to catch all the big moves) i can definitely smell the potential.
Relax and be happy.
  • #40
  • Aug 21, 2005 8:10pm Aug 21, 2005 8:10pm
Quoting merlin
ohhh... i see fiji man. interesting entry technique.

the obvious potential flaw is that you will miss some of the big moves that never pull back. but if this is an intermittent system (as opposed to a SAR system that has to catch all the big moves) i can definitely smell the potential.
waiting for pullbacks to the ma after initial price move thru is the only way i trade ma crossovers. as i have said you will miss some moves sometimes but on a 30 or 60 min charts it will allow for 15 to 20 pips stops. frankly it is the core of my trading. i will post a chart soon. jim
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