I trade NQ's and once up 10 handles, I move my stop to break even... My max risk on NQ's is 20 Handles in general to understand my risk profile. I made a change recently which might answer original posters Question: I now scale into a position, lets say from the short side, Last night at 1100pm I shorted NQ's at 7169 (first lot), I then shorted my 2nd lot at 7173 (2nd Lot). Scaling in. first Lot, once up 10 handles move stop to B.E. 2nd Lot don't move stop to B.E. and keep the 20 handle stop loss on it. 2nd Lot I also loosen up target profit level and look to make bigger money with the looser half of the trade. First lot target exit 7001. 2nd Lot Target ext 6981. I did this exact trade last night... and it was the trade of the quarter for me... big $$$$$. I woke up this morning and when I looked at my screens through my cell phone at 5:45am, I could not believe my eyes I was having the same issue as you, getting stopped out too often... so I loosened my parameters and was only tight to the once up 10 handles resort to break even on HALF of my total position. In other words I let half of my position flop in the wind a bit with a rigid stop loss of 20 Handles and the other half once up 10 handles move break even. I back tested it on all the crap I trade and let's say instead of making 10k per month, the results changed to about 12.75k per month. It was the prettiest trade I've made in a while: Also, one last point. You need to harness the randomness of the market. You need to have a function that lets runners run, or a portion of your position be a bit looser then your other rigid side. Harness some randomness. The reality the market is somewhat random, and if you are looking to have ultra rigid rules, your results won't capitalize on moves you would prefer to be in. An exact answer is difficult to find.
I dont even use stops they slow you down, spikes which reverse cost you right before runs. Yes you can get stuck in and hold for a big loss, but as long as you get stuck in and hold for big profits more often then its all good. Holding a bit of negative heat is better than death by a 1000nd cuts, knowing when to quit is ofcourse key.
Doesn't everyone? There's no right way. I personally like to play according to my pnl. I want to play tight when I start and loosen up as equity curve builds up. It doesn't matter what you consider a start to be - day, month, year, lifetime. I think backtesting is very misleading on this ... Generally, the wider the stop, the better results. Can you trade your real money with large stops? If you can, I envy your resolve.
I have, based on 1,000 trades, the opposite experience. Daytrading the ES I see that the optimal stop for me is between 3-5 points. So it depends on the characteristics of your trading system. Below 3 points the losses from being stopped out of a trade, that would have been profitable, are big as the stop is too narrow to give the trade room for developing. So putting my stop at 3 points or higher generates many additional profitable trades. Above 5 points the number of potential profitable trades that get stopped out because of the stop are almost zero, so profits are already maximal. And the number of losing trades stay almost the same as my system gets out before the stop is hit most of the time. So putting the stop above 5 points will cause extra losses as 5 points is above the highest loss I take in a losing trade. I would have to stop following my system to take a 5 points loss as I always have an exit signal before that point.
No, I have a stop for emergency. I follow the rules of my system and that results most of the time in a loss smaller then 3 points. So if my system tells me to get out I get out at 2 points loss, I get out and don't care about the 3 points stop. If my system says nothing, I get stopped out at 3 points. I never have a 5 point loss.
You can't do that!! If you have a stop on, the stop is the ONLY way you can exit!! Minimizing loss is not an acceptable practice.
Day trading systems have time constraints that most other systems don't. If you get yourself in a jam prior to close, you are screwed.
True. It especially sucks when the trade "was" correct, but trades lateral(essentially goes nowhere) until the final single-digit minutes or even final seconds of the RTH session. It's a penalty of sorts, but totally workable and acceptable imo, for using intraday leverage.