help with trade management

Discussion in 'Risk Management' started by oraclewizard77, Jun 23, 2009.

  1. oraclewizard77

    oraclewizard77 Moderator


    I currently get a trade signal based on my system with currently around a 60% to 65% win%.

    Sometimes I will scale out of the trade, and the trade will go on to reach my main target, so for example, 1/2 is scaled out, and 2nd 1/2 is left to run to target with stops being brought up to be.

    Problem comes into play because if I scale out, then I don't have a good risk vs reward. However, some trades if I don't scale out will turn into losers while of course some will in fact go to target, and some will hit the stop.

    I am not sure what the right solution is to this problem because as tested so far I am able to maintain a high win% going forward.

    Other problem is that I will sometimes dollar cost down 1 time when I notice I am getting another signal right near my stop. My thought on this is to just lower the original stop a little rather than give an equal stop similar to my 1st entry so that I don't take a big loss if both trades hit the stop.

    Do you think I should not average down, and just go for better entries with no scaling out, or can my strategy work due to high win%?
  2. why dont you use your software to find out how to smooth the equity if your signal allready get generated by an ats

    do a test with and without scaling out
    by not optimizing to much just take a fixed
    first target to scale out first half and see how it will effect your

    i personally think scaling out is/could be nesecary even tough it could avoid huge
    runups in the equity it preserves a psychological effect also

    others will not agree

    the aim should making making money consistantly and avoiding big drawdowns even if it means one could
    brake down the runups as well

    one never knows what kind of volatility is around the corner hence the reason for multiple targets
  3. Win rate 60% to 65% is very low with any strategy other than trend following.

    What is your profit factor so far?
  4. oraclewizard77

    oraclewizard77 Moderator

    The strategy is trend following but getting in at an optimal point, and getting out before or when the trend ends for trends that appear during the day.

    The goal is with the runners to make up for scaling out on the 1st contract.

    So far ave win and loss are equal as tested. Also, please note that I don't use back tests, just using forward testing, and have not had a good runner yet. If system gives me a signal that trend has ended, I start killing the trades before stop or targets are reached. I would also like to test killing 1/2 the contracts and bringing up stops to break even when the system gives end of trend signal again to try to give runners room to run.


  5. Scaling out is a way to finance your stop loss, or accounting wise to cancel risk on the deal. If you scale out you have to let the remaining trade run, because the realised profit is just a form of a hedge. You can keep your stop without risk anymore, or move your stop back to keep the same risk, but expand your time horizon. So if you were trading the one minute chart you will now manage the trade on the five minute chart. You have expanded you timeframe with a risk of a lower timeframe. Just a food for thought.