A few other things to keep in mind: 1) If you have aspirations to trade bigger size and potentially more symbols concurrently at any given point, then "reading the tape" will drive you nuts and won't be a plus to your overall plan 2) I personally move stops to B/E under the same circumstances as mentioned by NoDoji. I fundamentally do this based on what pisses me off. If price goes well toward my target and I let it stop me out for a loss, I will be pissed. If I get stopped out at B/E, I'm not pissed at all, no matter where price goes after that. That gets you started to keep psychology under wraps. Then log 50, 100, 200, 1000 trades and then adjust based on what the results tell you. I also kept detailed trade logs and tracked where price went after I got out . . . and glad I did. Gotta track and analyze your trades . Gotta. Keep trading. JS
You figured out half the battle. I did MUCH better when I just set my stop and target and LEFT it alone. Don't move anything, take your hands off the keyboard. There are only 2 outcomes that can happen. 1. you hit your profit target 2. you hit your stop. If you move your stop loss to break even what you will find it 1/2 of the time it works well and 1/2 the time is shoots you in the foot. Why complicate things.....
Same here. If I get a good profit going and it retraces back to my B/E stop. It's okay, it was a missed opportunity but a free trade, and I can re-evaluate the situation neutrally. But if my big profit turns into a loser by even a tick or two, it feels like a kick in the balls. And it might cause me to overtrade and lose more after that since I'm pissed.
How about a trailing stop? In my trading I've found price action , trending, choppy or consolidating defines my strategy. Different strategies lend themselves to different management styles, I use ninjatrader and have a few trailing stop strategies I use a lot. Mostly I like leaving my decision making to my indicators, I programed my favorite "get the hell out" indicator to change the background color of my chart slightly. When it goes off,,,, as NoDoji said (testing) has proven I should take profits, I might leave some on the table, and that's OK. I hate waiting 5, 10 or 15m for a fraction of a move! If prices continue on I can always reenter. Good trading <*)))><
Alright, well I have some more logging and testing to do next week. Thanks again for the posts so far . I'm sure this will help some people out. Good Trading all.
There are no general principles in trading. It is a mistake to think there are. The field is totally chaotic. Your principles should depend on your skills and objectives. For some people "the trend is your friend" works well because they have patience but for others it is a disaster of a rule because they have wide stops and when the trend reverses they lose more than they have gained ridding it. If you do systemtic autotrading then a stop is necessary. If you are an experienced discretionary position trader, it may be better not to use them at al. It all depends on: objectives, knowledge, skills, specific markets...
I absolutely never trade without putting a stop loss. Also I monitor my open trades quite closely and may change positions. But i feel you should always set stop loss and then continue to monitor the situation.
Look, stops are one thing, but trading as a profession means keeping on top of the market. Checking up on your position at work is not really to be considered as the thing to do. Trading is a full time occupation, like all other proper occupations. Putting a stop in and then going off to the local drug store is not how a pro would deal with a futures market....do you catch my drift? Stops are needed, but only amatuer/part-time traders have real issues with them. REASON: YOU ARE NOT ON TOP OF YOUR GAME!