Hi Steve(?).
This is one of the most discussed topics, obviously. Mike has a good thread on this I believe. StevieT also has a nice way of going about it(he trails daily bars by 10 pips afaik. check his journal).
In essence -
-you should use the same timeframe to exit that caused you to enter, UNLESS you "zoomed in" to enter a higher TF trade on a lower TF, then I'd use the higher one as reference, obviously
-you should realize whether you are trading with or against the main trend or hoping for a trend change to come from this setup (that would have to be BIG then. and I mean really B I G)
-unless you're sitting right in front of gigantic s/r and fib clusters, give it a chance to grow. I've got a 2 day trade on from Sunday's open that has by now grown over 350 pips, and I am cursing myself for closing HALF at 80 pips already
Viable methods would/could be: trail the daily bar with a set amount of pips, StevieT likes 10 for example, or trail behind the last price formation that you find means big s/r or similiar. Or you could allow yourself to feel free to close once you have at the very least three times as many pips as you risked, etc. If of course you're doing a 1H based trade, expecting 500 pips out of that can be tricky unless it is from a spot you expect to become a kickoff for a daily setup. Basically - give your trades a chance!
Oh and as for r/r before entering - needs a balance of not being too skeptic about s/r being impenetrable but also not so silly as to expect 20 years of s/r to go if you're sitting only 20 pips away and entering right in front of it...basically, as James always says - try to only take the very best setups.
I've also found that scaling out is basically great for that "hah, phew, took something, banked it, yay" etc feeling, but it TOTALLY messes up your bottom line. As you said yourself.
Just posted this to my journal:
"Say, if you've closed half at +100 and were aiming for +200.
The remaining half position would need to go to +300 (150 "real pips" from the second half + 50 "real pips" from closing the first half after one hundred =200 "real pips") to achieve the same result as simply closing the full position at +200.
It's a drastic reduction of efficiency, even if it ensures that the "visible" profit turns into banked profit.
I guess it's a tradeoff between making sure there's money made and allowing MORE money to be made vs the risk of also losing it faster again. As obviously bigger stake also means a faster decrease if it turns again as well."
Hope this helps a bit to give some ideas. Basically, give it a chance to grow, don't chop down fragile plants before they grow to be ancient barks and voluminous trees. How else are you going to get enough material to print all the paper(read: cash) you want?
Check out Mike's thread as well
Take care,
SeekingLight
- #3,163
- Apr 4, 2007 3:06am Apr 4, 2007 3:06am
- Joined Jul 2006 | Status: Charts + PA > * | 3,251 Posts
Thanks SeekingLight, what is your name or do you wish to be called by this? Where can i find Mike's thread?
Just checked, turns out that thread is in the private forum(James16). Thought it was somewhere on the public side. Sorry.
But StevieT's new method is pretty cool for exits, too. Check out the journal, it's an interesting journey
Basically it's like I said, give your trades a chance.
Trust price. Know yourself.
- #3,169
- Apr 5, 2007 3:12am Apr 5, 2007 3:12am
- Joined Aug 2005 | Status: Novice | 1,017 Posts
Keeping it Simple
