I trade the ES and NQ and, as you know, these can be choppy markets with brief trends. I have a delima trying to decide where to take profits. I prefer to trade for scalps or short trend legs. I have been trying to set profit targets where I perceive the next strong support/resistance to be but sometimes I exit prior to my target if I perceive the market to be indicating a turn. Sometimes I am right with my target and sometimes the market keeps running leaving me on the sidelines. Today was a good example of why I question my exit style. I was short the NQ as it started the last leg down after the Fed news. Per my strategy, I exited the trade at the first support area I thought might cause the market to turn against me. Unfortuneately, the market blew through that support and several others whle I watched leaving the vast majority of the move on the table. I guess my question is for those successfully trading the index futures. Since these markets usually have choppy days, what exit strategy do you find results in better risk/reward? Do you set targets, trail stops, grab quick profits, or use some other method to exit your trades? Thanks for any insight provided. Wally
I trade very similiar to what you describe. I scalp the futures and try to get in just before a big range bar comes in. Checkout my thread "Lundy's pictures and videos" In there u can watch me trade live, it would be good to hear your thoughts since we trade similiar. Here is what I do.. I partial out. Take half at your first target, mine is initially fixed but I may change it based on price action. Then trail the second half and use price action to exit. Taking profit is good... you can't catch the entire move everytime, or even any of the time. When I enter, I have lofty goals... if my risk is 3 ticks, my first out is gonna be 10 ticks.. but, it doesn't always work out that way... price action sometimes spooks me out of the trade and I take 1 or 2 ticks... If your entry is good, you can partial out fast, then rebuy it to better your basis.... this works great if it chops back a couple of times... sometimes, I can get those 10-12 ticks on the partial before it's even moved 6 ticks, because I went in and out 3 times for 3-4 ticks. Just try to keep a high win loss ratio and a low risk reward... and count the money everyday as a blessing... continually refine your strategy... if you have some losers you don't think u should have taken, or u should have got out, redefine the strategy to make it easier for u to understand and remember while trading intraday.... or, it may not be complex enough
Are you serious about having 3 tick stops in ES? Thats way to tight for me. Post me a chart of one of your entries where you have achieved 3 points with a 3 tick stop.
In volatile times I use a 3 to 5 point stop. That kept two trades that would have been losers from being so and became winners instead. In wild times, I reduce position size and increase stops.