Gaining an edge with Trailing Stops!

Discussion in 'Strategy Building' started by Remiraz, Aug 22, 2005.

  1. your trailin stop rules are arbitrary. You would do better to use sup/resis on the chart than an arbitrary (if i have +15-20, then move up stop).

    you should be shooting for general advances and minimizing general declines against your position. Specific targets and stops (especially arbitrary ones that have no current market context) are inferior to this.

    i personally believe that all traces of arbitrary rules should be removed from a system (as much as is humanly possible). I suspect that the reason we as human traders don't tend to do this, is because we simply don't want to do the work...

    ex. it's easier to say, "ok i'll have profit tgts of XYZ"
    rather than say "ok how should i manage my trades to extract the most profit with the least risk?"

    I mean, a typical trader might ask that question, but then they answer it with some static meaningless target that they use over and over (i've done this in the past myself).

    i hope i got my point across, sometimes my thinking inside my head gets muddied as it comes out...something like that anyway.

    sum up: arbitrary trailing stop as you have outlined is ineffecient at collecting profits and minimizing have left out current market flavor in the trade management.

    i should point out that i DON"T use sup/resis points for my stops or exits on profitable trades. i use an indicator to tell me (if losing or scratching) that the trade isn't working...and (if i'm profitable) where the 'high' points of a move most likely are.
    i'm not shooting for precision, but generalities. I believe this is a good way to get things done.
    #11     Aug 22, 2005
  2. Holmes


    I love trailing stops, could not trade without them!

    #12     Aug 22, 2005
  3. Remiraz


    thats a good idea. however using support/resist to determine stop imply that these areas have an edge. which might not be true.
    #13     Aug 22, 2005