I have not seen this discussion, but I apologize if the thread exists.... age old question,,, do you scalp your exit , or set a stop and move up/down as trade progresses.. I have traded both ways. Of course it is great to take a profit anytime you can. Let's say we are trading NQ. Tough part, where do I set the exit. I have used 6-10 points (which of course is not really a scalp in the traditional sense) before, and have adjusted up or down depending on VXN readings. Of course you gotta live with it when you take your preset profit, and it runs for mote without you... the good news is that you have taken a profit when the trade then turns against your position but you are out. Or , set a stop based on Support/Resistance which of course we hope continues to go higher/lower as the trade unfolds and we keep moving our stop up/down. I never catch the whole entire move, but on NQ I have runners of over 30 points this month. So, how do you handle it? How do you set your exits?
I'm not a scalper (and neither are you), but I try, when circumstances permit, to combine the two. Not necessarily so much. Don't buy into the myth that nobody ever went broke taking a profit. Many people did, by taking small profits (together with occasional big losses) when they should have let their winning position (or at least some of it) run. We are, in my case. Wherever your backtesting, forward-testing, statistical analysis and whatever other research you've done during the development of your proven edge demonstrated with a high degree of confidence to be the best statistical edge within your risk-management parameters. I'm sorry if it sounds like a pompous or pedantic answer, but it is the answer: anything else would be guessing. It isn't a "scalp" in any conceivable sense, traditional or nouveau. "How"/"where" to exit is a huge subject, and at least as important as how/where to enter. Since I'm an intraday NQ trader like you, in case it helps/interests you at all, I'll set out - in outline - roughly what I try to do. I scale out. Typically (but not always) I'll close the first third of the trade after a fixed target which might be around the size of the stop-loss (or even - shock-horror - a little less) and the second third at some volatility-related distance after that, and then let the last third run, if it will, adjusting its stop-loss manually just beyond the most recently formed swing low-high. But all these decisions, about stop-losses, moving them, target(s) and letting trades run will always be volatility-related, for me. That's just a very superficial overview, and ignores the fact that I also sometimes scale in, adding more to winning positions, depending on what type of entry set-up it was, and what my current directional bias is, and especially according to my perceptions of levels/positions of recent support/resistance. Please excuse my mentioning yet again - with absolutely no disrespect at all, I hasten to add - that I honestly think from reading all the threads you've been starting that at this stage reading a couple of introductory trading textbooks slowly and carefully would be of far greater value to you than asking essentially randomly self-selected forum members how they do these things. I hear you. Again, with absolutely no disrespect at all, please excuse my mentioning that last week a donkey with three heads could have hit plenty of big runners on NQ (this week not so much?). Don't imagine that that's characteristic or normal!
Xela,,, for someone that is not trying to be disrespectful you sure do a great job. I have read countless books. I have been in the markets since I was 13 years old, I am now 50. I was even a licensed Financial Manager at one time. Yo speak to me like I am some kind of rookie. And this forum is for posting threads and soliciting discussion. But I am not trying to be disrespectful... geez...
Well, many members here who have been replying to many of your questions over recent weeks have certainly taken that view. It seems we're all totally mistaken about that, and that I in particular have inadvertently offended you with some of my choice of wording when I've been trying to help you out, perhaps too repeatedly, in various threads. I apologize unreservedly for any offense, which wasn't my intention at all. I imagined (especially since I trade the same instrument and time-frame as you, and do it for a living) that I might be able to help. I'll trouble you no further, other than wishing you well.
I gotta give @Jdesey credit for a lot of his threads...lots of good, substantial discussions. As for this one, I am actually in the early stages of testing a day trading strategy, that was trying to pick up lots of small winners on mean reversion type trades, but I flipped it to buy short signals, and short but signals trying to pick up a breakout, with a stop at the former target. It's somewhat depressingly giving almost exactly three same return in both (broker loves me, I'm staying afloat, and I'd do better just buying the SPY). That said, I have yet to catch a true breakout/down with one of these trades, so I'm holding out hope that it will be better than the strategy it flipped...the good news is that I'm nominally profitable on it, and I'm keeping in positions for hours, not minutes...which is my USS Maddox strategy (just wait long enough, something will hit you). So I've got market exposure, without paying for it... And then my exit is similar to @Xela's (lower low). The hard part for me is seeing a "sell" signal that's actually a breakout continuation signal.
I also was deeply offended when you referred to donkeys with three heads. I was pretty sure that you directed that at me since I am an ass- as is a donkey. No need to apologize. I will be okay.
My thoughts go like this. It all depends on the type of trader you are, or want to be. When you're an expert, I think its easier to mix and mingle, but initially, you gotta get absolutely expert at just one. The guy who is looking for runners needs to have either a wider stop, or more stopouts. He needs to be comfortable with many trades going nowhere, and having to either re-enter several times, if he uses a tight stop, or use a wider stop, and be comfortable with the trade going against him. If he is going to shoot for 20 points, this is what is required, and some days he will get nothing, but other days he gets a nice runner and it makes his week. The other option is very tight stops, and small targets which hit often. This type of trader has to be comfortable with not too much analysis about overall sentiment or direction, but simply looking for the turn, long or short, and getting in right away, and just letting the chips fall where they may to hit either stop or target. The biggest problem is that people don't know what type of trader they want to be, or they think they want to do one, but realize they actually can't psychologically. (ie. after a few stopouts, they can't hold for the long swing trade, so they take a tiny profit) Because the 20 point trades don't happen every day, you have to be very patient. If you can design a system that has maybe 2 or 3 point stops, and 5 point targets, then you will get many opportunities every day. Of course some may say that the stop is too small, but its all relative. There are several places on the chart every day where a turn is highly likely. If you get in right away, you're either right on wrong very quickly, and then you move on to the next trade. It always looks nice in hindsight to catch a 20 or 30 point trade, but if you can approach the market every day knowing that you are just looking for little chunks, which are sure to happen, its easier I think than looking for the strong rally with clean retracements that just keeps on going. When it doesn't go, when all it does is range, you're left either in the negative, or bummed that you didn't get make any money. The guy looking for the little chunks probably got a few. On the day with a huge rally, the guy with the little chunks is still happy he got something.
Shit I would not apologize Xela, if he says he has all that experience, then he is not who he is as one of experience as all the questions he asks, he should be able to have many different answers. If you have 37 years of experience, why do you ask questions like a rookie, I can tell you don't have any knowledge of scalping or you would not ask about trailing stops. And you don't know where to place a stop? For 37 years? Yea I know I am blunt, people say that about me as I have gotten older and employees call me a bastard and that means I am being an owner. "But I am not trying to be disrespectful... geez..." well you got Xela to apologize and most likely you lost her further posts, and you pissed me off, poof.
Professors with doctorates will ask sophomoric questions to fuel discussions... And really, why be offended? I can piss away $1k on a stupid trade and keep level, you think someone behind a screen has the power to offend me? I do agree though, I hope @Xela believes the same as me about this and keeps posting, she's got lots of good thoughts to offer us all.
Well reading your question, and the first one of your posts for me, you do sound to be inexperienced, and Xlea's reply was properly worded with that in mind. But more so, she took her time to give you her advice in an effort to be of help to you, and not so much as a simple 'thank you'. Sad. I'm glad to hear that you will no longer be able to benefit from her advice, which is most likely over your head, and luckily I read the above posts before wasting my time giving you mine.