yea works great till it doesn't lol so many things people think will work in fact don't that's why my testing is my boss. it tells me what is real and what's just guessing. reminds me of take a losing system and turn it upside down lol
If your ENTRY rule states that you can only enter a trade when it's at x, and not somewhere between x and y, that's what you need to do. Forget 1:1 RR crap and stick to the rule. Otherwise, you'll always remain a noob.
Entry can be more difficult then exit. A multiple targets would make missing out less stressful. Entry into a long position would be easier with this. https://finviz.com/published_idea.ashx?t=WELL&f=091324&i=WELLd032505830i This one is more challenging as it is more volatile. https://finviz.com/published_idea.ashx?t=TSLA&f=091324&i=TSLAd033031092i
I'm guessing you are trading off daily bars,and you get a buy signal off the closing price.Next day,stock opens down x percent,halfway between original "signal price" and stop. If you are thorough in your research and have run simulations,I'm fairly confident you had several trades similar to the scenario you mentioned. In that case,trust your system and trade accordingly with the same risk reward parameters off the "new" (lower)purchase price.. You could also run simulations with an entry rule that restricts entry price vs buy signal price.
Says you. First of all the amount of traders around here who think they have created an edge simply by how they manage trades is hilarious. IMO using targets based on the % of profits you are getting or risk ratios is counter-productive AND counter-intuitive. Stocks have expected moves, so if you don't take advantage of that and try to maximize profits then you have zero edge. YOU might as well take profits as soon as you hit 50% because if you don't then 50% of the time, price will drop again and stop you out, and 50% it will move to your 100% profit target. With any luck, over time you might break even. I use price levels that I expect to take profits at, and I don't care how price gets there or how long it takes. It requires no management, and yields better results.
I should clarify. Swing trading and putting on a position over several candles instead of one price plop mitigates the risk of a full stop hit with all the slippage. Target is the same (unlimited, since the strat is basically trend following stocks). Imagine you're running a few billions and want 20% of your portfolio in some stock. Do you just go and put a limit order on support? Or do you test the market for a while to make sure you're not jumping into a trap? Perish the thought you might just sell what you want to buy, to see if anyone else buys it first. I traded penny stox in preparation for slinging Gulfstreams some day. Thin markets are like thin ice!
If you are running a few billions portfolio you have market makers clearing the market for you. You don't have to worry about testing anything, they will do it for you.