Attention Swing Traders

Discussion in 'Trading' started by asd123, Jun 21, 2007.

  1. asd123


    How do you deal with small rallies or shakeouts? if target is 200 ticks and your up 100, how much are you willing to lose if position turns against you? :confused:
  2. Never turn a winning trade into a losing trade... also Maximum Adverse Excursion (MAE) and Maximum Favorable Excursion (MFE)
  3. mogul


    That's kinda funny actually...

    I trade the er2 on an intraday trend basis, and I constructed my method to either take the original stop-out or trail at the retracement "waves" of the market.

    So up until yesterday I had about 15 losers in a row, and an open trade was 3 points in the money. Because of the string of losses, to stop the pain I applied the mantra of "never turn a winning trade into a loser", so I moved my stop to break-even.
    Well the now closed trade went about .5 points below break-even, and then continued in the original direction of the monster sell-off that occured yesterday. So by not following my rules I lost out on a ~$1,500/contract trade.

    Anyway, with this little story I just wanted to point out that it depends, if your method is designed to catch the occasional 10-15pt trades, then you may not want to be aggressive on moving your stop to breakeven quickly (2-4 pts).

    Oh, and always follow your rules.
  4. asd123


    I hear you Mogul. Same thing happened with BP a few weeks back, I was stopped out by 6 ticks, then market turned and hit my target of 165 ticks.

    Short ECU07 @ 1.3473
    MAE/MFE seem interesting
    I suppose current MAE 7 MFE 63 with profit of 38 if I closed(current 1.3435) Thanks for the feedback.
  5. Set a catastrophic stop then I leave and don't look at the trade.

    CajunSniper / Administrator-Trader