Knowing When to Trail Your Stops?!?#@

Discussion in 'Trading' started by Spectra, Aug 19, 2008.

  1. Q: I still do not understand how you decide to stay in a trade or exit? I bail way too early sometimes only to watch the market (I will not chase trades) go another 10+ points then you guys take profit. I feel “dumbed down” when I capture 10 points and you guys say “that was a nice 25 point run. — Marco

    A: For those of you who remember the old video game QBERT you’ll recognize the frustration marks in the subject line of this blog. I has received a lot of questions from newbies on when to trail and when to bail out of a scalp position in the futures market. Thank Marco, a user in our trading room, for the above e-mail inquiry.

    I can tell you how *I* decide to stay in a trade or take a small 10 tick profit on the YM. I will look at things such as the type of day we are in. Trending day or oscillation type like Bollinger Band/Keltner Channels being tagged? The strength of Alex’s filters and market internals such as NYSE advance declines. Are they hovering around 0 (indecision) or -2000 (in which case i’d definately trail any short!!) Have the ticks been biased to one side of the + or - scale or have they been choppy. Little things like that will help you see the true breath of the market. Use 2 or 3 or if your a member of the trading room. Go in a trade when the alert is BUZZED and exit when Alex says “I’m flat or I’m all out” Even if you have one contract. You could also just use your auto trail feature in your brokerage program or our Exit Assist program if you have eSignal or Trade Station. Also on days like OEX or FOMC it’s always a good idea to not trail your trades. I won’t trail on these days myself as a lot of games are being played in the market. All these things come with experience and time but we should be able to help you bypass a lot of time by stealing our experience and knowledge :)

    P.S. Alex has a video on this subject at:

    Geoff aka CajunSniper - Co-Admin
  2. Tcbjx9


    wow.. im shocked.. no war started because of the wrong link posted?

  3. Every freaking body has the same problem. I solved it by taking profits every time. 50% of the time I'm glad, 50% of the time I'm sad. It all comes out in the wash. Take profits like a fool. Who cares what happens next.
  4. It is your job as a trader to make money. It is not your job to catch monster moves or predict when a move is going to occur. How could you possibly know? You can live very, very well catching a crap load of minnows.
  5. [​IMG]
  6. On a related note, I've read studies suggesting that trailing stops result in net losses (unless they're very wide, in which case you might as well not use them).
  7. I like to trade size, and "catch some minnows." So, I agree.

    When the market is on a tear going up or down, I'll trail my stop with nt's superdome. I made some good money Monday with that strategy.:) I gave back some money today though, as the "minnows" ate my bait.:(

    Unless we're moving way up, or way down, I'll stick with netting some minnows.