ES Risk/Reward?

Discussion in 'Index Futures' started by MasterRaistlin, Apr 18, 2006.

  1. Hello everyone,

    I want to start trading the ES soon using a couple indicators I've found that work fairly well for entries. The purpose of this thread is that I would like to get a consensus of what a realistic stop loss/profit might be for this product. My personal opinion, so far, is that it should be a 2 point stop loss and a 3 point gain.

    I welcome all input. Thanks!
     
  2. bump..45 views and no one has anything they can lend to the conversation? However, I am just looking for relevant comments :p
     
  3. if you have a system and your personal opinion on where your stop loss should be is backed up by good backtesting with in sample/out of sample data, then it sounds like a valid personal view. otherwise, try your luck at the racetrack...you'll probably have the same odds and it will be more fun.
     
  4. romik

    romik

    If you do a search on ET, you will find a lot of opinions on risk/reward. After reading most of the posts, you will come to a conclusion that this is very dependant on the system used. There is little point offering suggestions, unless you explain the basics of your strategy.

    P.S. This has recently been discussed in "ES Journal".
     
  5. This point has been discussed/ argued much in the past, which may be why you have little response here.

    There are many approaches as well, so I'd just go with your own system and see how it works. Scalpers may risk only a few tics, while others think 4 pts is minimum!

    I personally never risk more than 1.5 on a retracement system. I aim for 2 to 4, depending on the market. Usually scale out of at least half at plus 2, except for days like yesterday. Works for me.

    Jay
     
  6. ============
    MrRaistlin;
    It varies.

    On a trend day /partial trend day may or may not get more than 3 points;
    and dont worry even if it takes more than 1 round trip
    [2 comissions] to get it. Wisdom is profitable to direct.

    :cool:

    Stops can vary, like PSAR, not in a strictv mechanical sense ;
    but in principal, parobolic stop and reverse snugs up stops.

    And if you see , say the market stalls /gives you 2.75 points;
    take it, aim @ not losing what it gives, instead of insisting on 3.
     
  7. Thanks everyone for your ideas and input. I was just thinking about that last part today Murray and I saw a perfect example; it just didn't seem to want to make the exact 3 points I would have wanted.

    Well this month is winding down. It looks like I'll start next month. Oh, to answer someone's question previously, yes I have traded futures before and I work at a prop firm. = = dirt cheap commissions :)
     
  8. I don't recommend when trading ES to use a fixed stop/loss protection nor do I recommend using a fixed profit target.

    My referenced to the word fixed[/b]...

    A number that usually doesn't change from one trading day to the next trading day eventhough the price action changes from one trading day to the next trading day.

    Your stops and profit targets should be based upon the current price action that your pattern signal occurs in via what I call sometimes adjusted stops/profit targets as the price action changes from one trading day to the next trading day or from one intraday cycle to the next intraday cycle in the same trading day.

    Simply, its absolutely critical you know what type of price action your trading in to know where to place your stops and where to take profits.

    If you don't understand the price action...that's when I think its ok to use fixed stops/targets until you gain more experience and learn that not every trading day (price action) is the same.

    Mark
    (a.k.a. NihabaAshi Japanese Candlestick term
     


  9. I have a question but first i would like to explain how i limit my risks. I daytrade the ES with a FIX stop of 2 points.

    I took about 1000 trades. For each trade i noted the entry price, the exit price, the maximum open loss and the maximum open profit.
    With this data i tried to optimize my stop. The aim was to make the highest return possible in combination with the lowest drawdown possible.

    The ideal stop was below 2 points. So i took 2 points. In these 1000 trades less than 5% of the trades were stopped out.

    Why would i used a NON fix stop, and why would that stop be better?
    And why would a fix stop be related to not understanding price action? I think thta if you understand price action you can use thighter stops, so just the opposite of what you claim.
     
  10. I use 2 point stops and have taken profits from 2 -20 points depending on what type of day it is.
     
    #10     Apr 22, 2006