Exiting trades on the ES/NQ/YM

Discussion in 'Index Futures' started by FireWalker, May 26, 2004.

  1. For the index intraday traders out there: How would you categorize someone who trades from pivot to pivot? Using divergence or candles at pivot points or S/R for entry and then exiting at the next pivot? Is that considered scalping?

    Under what conditions do you hold through a pivot point or S/R area as a longer term trade? Or are these mutually exclusive methods of trading?

    Specifically I'm experiencing conflict in exiting a trade at the target (pivot) with the desire to "let your winners run".

    BTW, I'm not a fan of scaling out as you have your largest position on when you lose and your smallest when you win, so I'm assuming fixed size. Or is this wrong thinking?
  2. dbphoenix


    If the trend's not violated, why exit?
  3. Yes, but which trend? Frequently you're entering on a small time frame (in the direction of the larger timeframe), but when do you change the trade to follow the larger timeframe?

    The indexes are very good at taking out trailing stops so the conflict is deciding when to grab the extensions of the moves and reenter (exit at pivot target) or to hope for an out-of-the-ordinary move that pushes through pivots and S/R and allows a trailing stop to be profitable.
  4. fan27


    For me, being consistent with my exits works best. I have had success selling winning long positions into strength as well as using a trailing stop technique. Problems arise for me when I try to do both.
  5. dbphoenix


    The trend that's defined by the swing points. Even a 1m chart has swing points.
  6. FireWalker,

    The definition of scalping has nothing to do with pivot points, candlesticks, divergence nor s/r levels.

    Also, there's hundreds of ways to compute pivot points...

    You haven't provided any info about your computation of pivots nor posted a clear example (chart is the easiest way).

    With that said...most scalpers I know are using some sort'uv special execution platform more suitable for fast trades...

    In and out in a matter of seconds.

    Most scalpers I know do not enter a trade trying to capture some big trend...

    They enter a trade to scalp a few ticks.

    Most scalpers I know are trading very high volume (more than +25 rt's per day) and getting some sort'uv special commission rate.

    Then I saw you using the term longer term trade.

    You went from scalping to possible position trading or swing trading.

    These are very different trading styles and can cause major problems for beginners that try to do both styles at the same time...

    Very difficult to manage trades and to stay discipline.

    More often than not...problems will occurs such as entering a trade as a scalper...doesn't go your way...you convert position into a position trade or worst (overnight hold).

    You need to sit down and figure out what your trading style is going to be...

    Master one style or go at it long enough to the point where you know its not something suitable for you before taking on a different trading style.

    Simply, if your big concern is about letting your winners run...

    You should not be scalping...way too much conflict.

    Also...you asked...

    Under what conditions do you hold through a pivot point or S/R area as a longer term trade?

    After you figure out what type of trader you are...you'll be able to better manage those situations.

    However, it's absolutely critical you trade via a plan.

    Specific details that has criteria for when to exit (reversal signals, profit targets, trailing stops or initial stops).

    Example...if your Long ES @ 1111.00 and your methodology tells you your target is 1115.00 and there's a pivot point at 1114.00

    Why would you exit at 1114.00 preventing you from your goal.

    Yet, if pivot points and s/r levels are part of your trading plan...

    I know some traders that move their stop to a pivot point trailing stop once price passes through it.

    If it retraces back to the pivot...they're stopped out for whatever profit they had...

    If it continues without retracing back...

    Guess what...they've caught a runner.

    However, if your profit target occurs prior to a pivot or s/r level...you need to respect your trading plan and exit when that target is reach...

    Nothing wrong with following the plan.

    I'm not saying that's how you use pivots nor am I telling you how to use pivots...

    I am suggesting you should not be entering trades without a destination point...at the minimum.

    Once you become more experience...you can add something like...do not enter trades without a contingency plan (re-entry signal)...

    We as trader's too often in the Index Futures will exit a trade for whatever reason (small profit, stop out for loss) to only do nothing when price reverses and goes their way without them on the train.

    "One's destination is never a place but rather a new way of looking at things."--Henry Miller

  7. Phoenix is confuced*. I believe you carefully noted the trading context and infused it with the MM and R/R aspects as well.

    dbphoenix went OT when he introduced a spurious topic that is NA.

    Stick with your approach and dicipline.

    * This is rarely used word for most and has a very narrow application.
  8. FireWalker,

    What's the whole story for you...

    Are you a one contract trader or are you trading via multiple contracts?

    When you say your trailing stops...

    Are you saying your position is at a profit and you've now moved your initial stop into a trailing stop?

    Do you have a re-entry signal?

    For example, you get Long @ 1111.00 and exit at your target of 1115.00 or exit at 1113.00 via your trailing stop being hit prior to reaching its goal of 1115.00

    Price goes sideways into a tight consolidation...bouncing up and down between 1115.00 and 1113.00

    You need to have a re-entry signal for situations like that if your worry about it taking off to the upside again way beyond the 1115.00 price level.

    Yesterday's strong uptrend is a great example.

    I saw a position trader go Long in ES @ 1133am est 1096.25 with a target of 1099.00

    ES hits it nicely...he promptly exit his position accordingly to his trading plan.

    ES then retraces back down slightly more than a point then powers back upwards to test the 1101.00 price level...

    Without him on board.

    No problem because he has a contingency plan (re-entry signal) and no signal was given.

    So he continues waiting...

    Later in the day around 2:39pm est his contingency plan kicks in and he enters again @ 1106.50

    His contingency plan calls for him to switch to a higher chart interval and manage the trade that way.

    He does and his target is 1112.00

    A target he gets.

    Simply, there's no conflict...

    Either you have a re-entry signal or you don't.

    If you have a specific trading plan for re-entry and no signal is given...

    Guess what...your on the sidelines watching no matter what the Index Futures do.

    However, if you do get a re-entry signal accordingly to your trading plan...

    Go for it.

    Do you have a contingency plan (re-entry signal)?

    "The greatest conflicts are not between two people but between one person and himself."--Garth Brooks

  9. I trade 1 contract and use pivot points, previous HLC, daily swing points, etc. as potential S/R.

    Entry is divergence OR a reversal candlestick formation near one of these #'s on the 70 tick chart. It doesn't have to be perfect, just the gist of a reversal in the direction of a longer term trend. (Volume has to look right for the day as well. eg. if going long, the accumulation better not be distributed yet.)

    Entry can also be a continuation signal on the 70 without div. eg. CCI on the 70 tick chart shows signs of reversing to the long sde when the 350 tick is still on an uptrend. (ie. a pullback on the 350.)

    Reversal setup could also be div on the 350 at a # with some sort of entry signal on the 70 (candle, div, or continuation CCI pattern)

    Initial stop is the recent swing and I try to keep it at 1 pt ES.

    Those seem to be a good entries (filtered to not stand in front of strong trends by knowing where price is in relation to previous day's range and trading with the 34 SMA). And it provides lots of signals so I'm having trouble discerning which trend I should be on once entry on the 70 is good. Target out at a pivot # or S/R? Exit at the first sign of weakness on the 70 tick? Stand back and wait for weakness on the 350 tick? Or sometimes the volume pattern is great and it hasn't been distributed yet, so just hang on regardless what price does? There is a synchronicity between entry and exit I don't yet understand.

    Exits are the problem.

    The target at the next pivot or S/R # is very frequently touched (and usually immediately reverses for a moment). So grabbing the extension of that move is tempting. But I have a strong desire to hold so I frequently cancel that exit order.

    Sometimes price consolidates and punches through the #, but other times, that's the swing high or low. How do you make that determination? Should you read the character of the approach to S/R to decide? Trailing stops usually get you out about even. The only exit I have no conflict with is the parabolic distribution. Those are great.

    So you're probably right that I don't know if I'm a scalper or a swing trader. But how does one know? I like to hold but the ES rarely trends nicely so it seems better to exit at those targets and re-enter. I'm likely attempting perfectionism here too. Is what I describe scalping or swing trading?
  10. I'm not suggesting this, but if you posted a print, then it would be easy to see your intent to use the approach you describe. A marked up chart would do fairly well as well.

    I don't do stuff the way you do but some people here might be able to use the info to advantage to post to you.
    #10     May 26, 2004