I trade 2 systems. One is a volatility BO, the other a retracement to last low congested price area. So I may be in after but near the start of greater movement. I trade on a daily basis rather than intraday. I don't use targets but I do use a couple of exits that make sense for the type of trade I'm in. For example, I found that volatility based trailing stops suit me well for the volatility system. I like to move stops to BE to turn trades into no/low risk ventures. Which exact stop I use is dependent on the degree of relative strength the trade is showing relative to the market. Typically, if the trade has a strong rs, I permit a wider stop, a weaker rs prompts a tighter stop. Position is sized based on a small % risk, and further, each position size is capped at no more than a certain portion of principal equity.
RE: Trade with trend: Think of the trend as a current in a body of water. There are times when you can go against it and live, other times you will drown. In most cases its easier to let the current carry you, even the strongest of salmon die when they swim against the current. I will only trade against the trend, if the opportunity I see offers a higher R/R ratio, and the larger trend conflicts with the one I'm looking at. In the perfect world, when all trends are the same, which is more frequent in extreme up or down trends, I play the trend regardless of timeframe. In consolidations, in times of uncertain and ambivalent bias, I use other momentum indicators to fine-tune entries and exits. Most breakouts will fail, so I find myself entering more on retracements, and that allows me to enter with tighter stops, which I can be more flexible with. RE: Cutting losses and letting profits run: I have predetermined entries and exits. I never open, manage or close a position without having these points pre-determined. RE: Money Management plan: I have a "global" and a "daily" money management plan. The core of my plan, is a minimum R/R ratio of 1:2. On the "daily" plan, I'll take some plays with R/R of less than 1:2, and I reduce my exposure, if the R/R ratio is better than 1:2 I increase my exposure. For example if my primary exposure is 2,000 shares, this is the scale I use: 1:4 + = 5,000 shares 1:3 = 3,000 shares 1:2 = 2,000 shares 1:1.8 = 1,000 shares 1:1.5 = 500 shares 1:1.2 = 200 shares On plays with R/R ratios of less than 1:2, I scale and increase exposure as R/R improves. If the R/R based on the net average price, is at least 1:2 I scale into 2,000 max. If the R/R improves I follwo the scale. This keeps me in more trades, and preserves my exposure. Hope that helps.
Achiever, Here's a link to a trade I posted on this board: http://www.elitetrader.com/vb/showthread.php?s=&postid=290355#post290355 That will show you how I played a trend, scaled and predetermined entries and exits.
The trend turns positive when the close is higher than the previous peak. Then, a modified Gann swing retrace of at least two lower lows (OK to have an inside day). Wait for the pivot to form and then a buy stop order higher than the previous day's high. Loss is below the pivot low. Price objectives are 1/2 box P&F charts or my own hillbilly method. You will need a filter so as not to take all pivot buys. I found mine. Chuck
TWTT = breakouts Cut losses = at 1.5% of initial investment I wait for a reverse if none by 2.0 % I'm out. Let profits run = until there has been mostly selling for 8 minutes.
Since the price may transgress your stop several times throughout the day, but you determine the ma violation as to the price's close, and you trade based on the daily, my question is, when in the day do you determine that indeed you are to stop out? For example, is it in the last 20 minutes of trading? The last 5 minutes? The next day at open?