Registered: Aug 2007
10-10-12 10:28 AM
Quote from Buzzednow:
New to the forum and I am sure this subject has been covered many times before, however it is not actually that easy to filter through the noise through the search function.
Anyhow, to make it short and sweet: I have developed an intraday trend following system across various futures markets.
The system generates interesting entry levels however I am struggling to determine optimum profit taking and stop-loss levels.
Could anyone direct me to some interesting reading either research/books or existing threads on this site? Happy to discuss your views/tips as well!
Well, you need to fill in some info as it be difficult to just give a generalization type answer, cause not all markets act the same nor timeframes. If you day trade grains react differently than indexes (and again even within the Indexes), the energies, financials and currencies. All have unique personalities, British Pound is more of chop within trend, whereas Aussie has a more natural trend. Take ES for example, it has different time segments where the volume can push the price action to have Swings of 3.5 points and other times of just 2.00 points based on one minute bars, so depending on your timeframe, swing distance plays an important part of overall targets and stop loss.
I am pretty much a Scalper no matter what I day trade, however, again depending on the market, targets differ but risk seldom changes. A good method that can help with targets is called ZigZag, it is a simple line that goes from pivot highs to pivot lows. So you can take swing movements using this indicator and you can refine them by the 30 minutes to find the ranges that can be expected for time periods. Of course the first 60 minutes of any day session market will show biggest range, often times will make either the high/low of the day. Then next 4 hours will offer much less with a bump in range after that into the closes.
I take it you are a new trader, cause old traders already know where to place protective stops and targets before designing any method for entry, cause unless you are a Scalper requiring perfect entry price, most all other entry prices are much less important. Trading really not all that important on the getting in as the money is in the getting out.
Most platforms like Ninja have sim trading and areas you can breakdowns trades to find MAE, Max Adverse Excursion and Max Favorable Excursion. Do at least 1000 trades and you can see where it went plus/minus as a means of showing best targets/stops, I always want to capture like 80% of each.
For as many traders are as many ways to extract profits/losses, many go for the most profits which usually will offer the most eradic equity curves and drawdowns, as one develops in knowledge and skills, eradic anything is not as favorable as smooth equity curve and concentration is spent not on entries but losing percentages.
I actually find that "Search" is very good in this forum and knowledge is gained by doing much much reading. Where you might be searching for a certain topic, someone else could put new ideas in your head to test out later.