your stop tightness depends on your strategy? what is your profit target? i prefer a 1 to 1 ratio.. i use a 5 pt stop and a 5 pt target. I figure that way .. all I have to do is have a higher than 55 % win ratio in order to break even with commissions. If I am higher than that then I make money. !.25 ticks is too small in any contract though. BAGGERLORD IS COMPLETELY COPRRECT..there are more somputers and algos trading in the es and spy than anything else I can think of at the moment.. i think es is a little tough to trade because i do not like the tick size..
I've only tried the ES. I have heard that the ER2 is a little smoother. Maybe I need to look around a little. Thanks for the input. I appreciate it. Paul
One more consideration able tight stop is transaction cost when you got stop out all the time. I had months that transaction cost alone kill all my profits.
I put some blanks in the above. It looks like some sort of strategy. To constructively review the strategy I wanted to open it up a bit. I view a position as something price moves away from. It also moves away from anything on the other side of where price started from. At some point the price ends moving away. I see this as a time to take a new position. So I added the bold in the spaces: 1. A _line___will be placed upon _beginning to make profits__0_ ticks from the __beginning___ point. 2. Once reaching the _end of the movement away from the beginning point______ (_no matter how long it takes_)the _I___ will move _ to do a reversal__0_ticks behind the current price once a new bar is created and this bar __ has nothing to do with__ the closing price of the last bar. I will trail with a __new line___0 ticks until the below criteria is reached. 3. If the opening price of any successive bar is __ up or downrelative to ___ the closing price of the last bar I will _hold__ my position and _not__ take my profits_____and I will just keep track of the conditions of step 2___. My first concern is my _learning by doing a routine_ . This will be used on the ES. Attached is an example that roughly does the above. Step 2 is done by using volume along with price. Where you see the reversals look at the annotation on volume: it is either R2R indicating a "long" has ended and simultaneously a "short" has begun. The vice versa is B2B where a "short" has ended and a "long" has begun. The example does not do all the trades possible. Most of the trades are done to be sure to always be on the right side of the market. The list of reversals tells the story on when the person took a trade to be sure to be on the right side of the market. This is 15 intraday trades on ES where only profits (20 times 500 in margin) is used to make 44 points net of wins and losses.(20 times 44 times 50). there were no stops used; instead the person just stayed on the right side of the market according to the consideration of how adjacent bars speak about what is going on. you look at the open following a close; he, differently looks at both ends of the bars with respect to HH and HL (long trading) and LL and LH (short trading. One or the other of these two events doesn't always happen. What does? Not much. Along with the two cases for long and short, volume gives you a tell. You may be able to see the volume tells by the graphic; I hope so.
blahblahblah. yeah. when the price stops going up you sell, when it stops going down you buy - that's why you are such a superstar - or not? do you masturbate when you post?
Depending on your car sizes and discipline a 1 or 2 step martigale average down may buy you distance and time for your trade to play out. This is very dangeous but effective if used in a calculated manner. Going beyond 2 steps will likely result in a big blow-up. ie Sample assuming 1.5 stop and a car size of 1. 1 Long @ 1000 Entry 998.5 Stop. You can let the market drop 12 ticks to 997 and add 2 contracts to your position. You endup Long 3 @ 998 4 ticks from break even holding 3 contract 2 ticks from your original stop of 1.5. If the market checks up you get 3 cars for the ride. If it drops another two ticks your out at your original stop x 3 contracts. This is dangerous but it buys you time and opportunity with the same risk profile x 3. If you are successful 50% of the time and let your profiits run 3 x your stop. You will generally come out ahead. You could probably do this one more time without getting into too much trouble but it can very easily runaway and wipe you out. Step 2: You are long 3 @ 998 You can add 6 to your position at 995 and average your costs down to 996. You've covered an entire strike and are 4 ticks from break even... 2 ticks from your stop but are trading 9 x your car size. If your stop is 3 points ie $150 for ES Your add to positions steps are 6 and 12 and exits of 6 and 12. Obviously the spread between will mean more time for the trade to ferment. I'm not advocating averaging down as a trading strategy but there are times and circumstances that play out well. If used sparingly with tight limits you can absorb 2 to 3 points of market movement without significantly impacting your risk profile.
Yeh, i'm looking for price to move away, almost instantly. So the price i choose to take is favoured by the market and i can go ultra tight stops wise. If the intention around a price becomes blurred then i'm out until i can find some clarity, or until the market finds its clarity.....i can only be with the market....if the market is undecided....how can i make a decision?
If you are trading in a constant time frame then all you need to observe is whether your entry/target/stop criteria can be applied to the CURRENT volatility. If you still want to trade when vola is high then cut your size back or/and use different target/stop values. If vola is lower than you need to see it then dont trade at all. I assume you trade patterns only and want to wait for the same kind of setup, otherwise the above is not the golden rule.