Logical stop-loss for er2

Discussion in 'Index Futures' started by feb2865, Feb 8, 2007.

  1. feb2865

    feb2865

    mmm ok

    I am shooting for 2 full points which is atainable most of the time on er
     
    #11     Feb 8, 2007
  2. Risking 4 points to make 2? :confused:

    That won't take too long before the ER2 eats away at your account. For every 1 loss, you'll need 2 wins to break-even before commissions. What happens if you lose 2, 3, or 4 trades in a row?
     
    #12     Feb 8, 2007
  3. tyler19

    tyler19

    so one loss is going to wipe out two of your wins?
    You need to win 75% of your trades to be profitable.
     
    #13     Feb 8, 2007
  4. Something I do, as mentioned previously, is use ATR, but with a twist...

    I take the maximum ATR average over the last x bars and multiply that by a factor of usually 1.6 for ER2. If result is near some TA level, adjust accordingly. Your x bars and factor are dependent on your timeframe and your r/r. I use x of 3 on 15m and faster charts. If there is going to be price expansion I want to recognize it quickly and if needed adjust.

    Any chartware worth using has some method of doing this. Using Ensign its a snap with 2 DYO lines.

    Good trading.
     
    #14     Feb 8, 2007
  5. feb2865

    feb2865

    thank you guys I am not here to argue on what risk/reward should be used. I assure you I can draw 2 points form er consistently and that's what matters to me. Another thing is that I don't use same amount of contracts all the time. It all depends on market conditions and patterns

    As opposed to some traders(of course respectfully) I don't based R/R or even stop-loss based on % of equity rather based or volatility, which should be adjusted depending on market conditions. If you're a trader still on a so- infamous 3:1 R/R ratio, well good luck to you.

    I just wanted to know what's an average S/L from er traders outhere based on current market conditions.


    I mean, don't want to be rude or anything, you know. Just trying to make myself clear once more


    Thanks
     
    #15     Feb 8, 2007
  6. feb2865

    feb2865

    Thank you osorico

    point taken. I will definitely check on that. Sounds logical
     
    #16     Feb 8, 2007
  7. tyler19

    tyler19

    cool
     
    #17     Feb 8, 2007
  8. Which is exactly why I use a short period ATR.
     
    #18     Feb 8, 2007
  9. Exactly... 2 of my automated systems have a stop 3 times as large as the profit target. I designed them this way for my psychology. I prefer a minimum of 80% wins so that I will never turn it off after a string of losses. I always crank up the size after a losing day because 9 times out of 10 it absolutely kills it the next day. Its much easier for me to accept losses when I am right more then I am wrong. I understand that in the long run I am sure a system with 50% winners could produce more money but I dont think I could sit with 10 losers in a row and a 10% drawdown. With high % winners its easy to tell if the system is starting to lose its edge rather than waiting until it depletes half of your account. Do what works for you...
     
    #19     Feb 8, 2007
  10. feb2865

    feb2865

    How short?? like 7 bars??
     
    #20     Feb 8, 2007