Daytraders, If you use tight stops, is it across the board on all trades or selectively? What features do you use for your Backstop if you do?
Selectively, each trade has their own risk/reward profile. Sometimes I am waiting for the downside BO to fail and then go with the countertrend traders and the trend traders that are now exiting their positions like in your example; both sides are longing so a tight stop below the low of the bull spike is justified. Then wait for 2 legs up, and move the stop to break even/ or take profits. If you are lucky the 2nd leg will get far . But most decisions are based on higher TFs as well. As far as backstops... Usually a previous HL (if bull trend established) that I don't want to see surpassed; if price tries to pullback to those levels , but the pullback is weakening in strength then it could be an idea to buy right then and there, or.... have a tight stop and buy each low TF HH (if the BO looks good) untill one succeeds. H
The low of that bull spike doesn't squeak but 98.25 squeaks pretty good on that one tho until considering all the lines that were overcome again on the way to get above 10.6K on that single shot, two averages, two pivs, the 10.6K itself, dbl bot at 200 support, lawd knows what else, lol. The lower of the trigger candle or the candle before it is widely used and one to have a good look at. it is my first go-to if nothing else jumps out which is tighter. For backstops, i like to use averages, pivs, round number levels, then fibs and trendlines, just a hassle to draw them but they can sure earn their keep. they can also get in the way of seeing a nice clean simple chart, so... What backstops do you like to base your trade off of?
Good topic, I selectively set stops based on price action in each chart. General approach for daytrading stocks and ETFs priced $15-$40: Max stops just under current lod Tight trailing stops .2-.3 Wide trailing stops .6 I usually set up at least 2 trades with different entries and stops to avoid being shaken out of single trades
I dunno about the rest of you guys, but I especially like my stops tight on losing trades. "Stops" are subjective and an interesting concept. Tight/loose/strategic... all have their merits and warts. Whatever you think, can't survive long term without them.
It depends if I have my stop far I just trade less size. And then either double down in the opposite direction or adding to my short at higher prices.
The great thing about free stock commissions for USA traders is we can use super tight stops and trade much more frequently without commish load taking profits.