A volatility based stop is probably the only thing I don't ever think about anymore. I really recommend you do the same. If you're right in the direction, then you have enough room for it to fluctuate before it wins. If you're wrong, hopefully you're not wrong too often. Far enough to prevent stop hunting and avoid getting stopped out on random fluctuations, close enough to still take you out if you're actually wrong.
Yes sir. Some good balls are needed 100k gross annual = 1k bets 200k gross annual = 2k bets And so on.....
Though be aware I only do the daily chart. I don't like intraday. So not sure if volatility-based stops help there.
I can’t devise a method for you, but position size should decrease as volatility increases, and vice versa. A forum, or internet search should yield many results on how to use ATR to do this.
With just this information, I'd say your position sizing is the culprit. Part of good risk management is position sizing. I do not know what your trigger or set up requirements are to enter a trade (and I do not need to), but the reality is that they do not all offer the same expectancy. What I recommend is that you develop a system to rate your set ups. In this case, for ES you can rate them as 0-4 and NQ 0-3. When your requirements are not there, it is a 0, so you do not trade. An OK set up with a small positive expenacy, you trade 1 lot. better, 2, etc. Or, you can enter the positions over a longer period of time with 1 lots. That way if the future goes against you in a short time, but your system still has a buy signal, you can buy 1 more on the dip vs being stopped out. I traded for a very long time. I'm never right in 30 seconds. My customers that consistently make money, work into positions. They do not buy a block of stock, options or futures and then hold their breath. And, they do not always trade the same size on each trade. The important thing to change is that you need a process to rate the merits of each trade and a process after to adjust those expectations with real data. This will fine tune your trading system, make it more systemic and place bigger bets with a higher expectancy and smaller with a lower ones. At some point, with enough data, you will avoid the times where you would have placed a trade with a 1 rating and move on to better set ups avoiding the ones that are not good enough, but still sizing your trades. This will give you the confidence to stay in good trades longer and exit because your setup changed not because you reached your random stop limit. All in for you on each trade is making you set tighter stops than necessary and not placing bigger bets on higher expectancy trades. You need to think like a card counter in blackjack. Bet more when the count is in your favor and bet litte, or in this case nothing when not. Bob
On ET since 2004 and only now starting to trade? What did you do all these years? Trading from start 4 ES and 3 NQ contracts is insane. The fact that you do that without having real proof that you are consistently profitable proofs that you have no idea what you are doing. Get quickly rich will ruin you. Start with only 1 contract in only ES or NQ. Proof that you are consistently profitable. After that you can go bigger and trade ES and NQ. There are always two possible outcomes: You become successful: If that is the case by starting small you will need extra time before you will be a multi millionaire. You fail: you will lose all the money invested. I always say: it is better to be a millionaire a bit later, than to be ruined too soon in case you fail. Avg Trade (win & loss) $34.17 is small (less than 3 ticks ES) and the result of overtrading. 26 trades is far too much, you can never do 26 trade a day with a high probability of making a decent profit. Decent profits means at least 2-4 points ES per winning trade. For that you need something called TREND. TREND will help you stay in trades longer and increase your average profit per trade. For as far as my personal experience goes ATR does not work intraday. Or at least I found better tools.
Answer 1) If you know trading 4 ES and 3 NQ is huge (for you) and very risky, that's another way of saying that you can not manage that type of risk. That type of risk is too big for you. Worst, you're acknowledging its too big of a risk for you. What's preventing you from trading 1 ES and 1 NQ until you can find answers to your problem and the solution then consistently work for you. Next, after it consistently works...go back to 4 ES and 3 NQ. Simply, your risk management sucks and you know it and you openly acknowledge it. Stop being a knuckle head and lower your risk (reduce your position size) until you can figure things out in current market conditions. You do not want to put yourself in a situation were you "feel like" you need to trade to make money for whatever reason because it will make you trade in poor market conditions that you're not prepare to trade in or do not want to trade. Answer 2) If you're using any kind of risk:reward or profit target... As soon as you reach your goal, take the profit (exit the position) and do not then become "Sheriff Hindsight Analysis" via becoming frustrated if you had stayed longer you could have grabbed a bigger profit. Simply, know your destination target before departure and don't bitch about it after you reach your goal. Stay focus and stay happy when you reach your profit targets...bank the profit and move on...don't dwell on that you could have gotten more. Those that dwell on profitable trades that had reach the goal that was designated...it sets them up for future trade problems (discipline problems). Answer 3) You're acknowledging you're letting the market take out your stops most of the time for big loss... What's preventing you from tightning your stops ? For example, if your stops are -3 points...use -1.5 points assuming you're accurate when you say they take out your stops most of the time. I define most of the time as a lot > 50% and not a little > 50%. Strangely you said something odd...if you know the price action is poor...why do you need to focus on the trade ? You should condition yourself that if you know the price action poor...do not trade and/or lower your position size. If you can not do that...you must then recongize you have a serious discipline problem. Remind yourself often (write it on the wall in front of you) that if you feel the ES/NQ are fast in their price movements...its too fast to be trading it and the speed of them may be due to increasing volatility. Volatility is an important issue if your trade method is not based upon volatility which also implies its not suitable to be applying in volatile market conditions. wrbtrader
Since you've been here so long I thought you had more experience than this. No offense, but this sounds like gambling to me. In my opinion, you should stop trading completely and focus on learning your chosen market better. Choose either NQ or ES. Don't do both at the same time. ES retraces a LOT. This means that tight stops or trailing stops usually don't work unless you actually bought/sold the LOD/HOD. Once in a while ES picks up momentum and trades in a straight line, but most of the time there's a lot of choppy retraces while going from A to B. This means you either need to take a good exit when the market's traded as far as it's likely to trade before retracing OR stay with your initial stop OR use a wide initial stop. Market knowledge (study and backtesting) is your solution. Also - as said by others already it's insane to trade 4 contracts when you obviously don't know what you're doing well enough yet.