I'm trying to improve my scale outs in the ES. Trading with 3 to 5 contracts and having trouble decing when to take some off, when to move stops, when to get out of runner, etc. Any ideas?
I trade ES exclusively - it's a hardcore instrument trading with every trick in the book by the best traders in the world, live or programmed to be automated; and just because market makers are physically absent doesn't mean they're without influence in direction to Quants programming mechanical systems. Having said that, any stop you put on the board has been factored and a move is in play while if not before you decide to excecute a trade to catch your stop. So the questions, and you needn't answer the board, are these: are you good enough to time and evade their advance for your stop before you place a trade? And if you are for how many ticks or points do you want to join them catching others' stops? If your timing isn't impeccable, your screen time is limited and are unsure where to enter or where to exit then program this dome strategy: 6 contracts: 1, 2, 3; 3 ticks, 6 ticks, 8 ticks; with a 4 tick advance to break even, a 1 tick trailing stop initiated every other tick and a 5 tick profit trigger to automate the trailing. What'll happen is this: you'll enter a trade, at a point it'll break even, at 5 ticks it'll jump and lock in a point and a rise past 6 ticks will lock in 6 ticks. I wouldn't stray from that dome strategy or venture off trying to attain more than two points until you can, and no offense, answer your own question of where you either want to scale out or add positions. Check this out: Let's say a trade looks like it's going south, but you waited 5 minutes for the set up and you'll be damned if you'll be forced off the set - bam!, in a blink of an eye you got rid of 5 contracts with "none" as a trade strategy and posted a limit for 5 to scale out. Now you'll risk 1 contract and play it by ear. If it goes as planned, scale back in ("none"). But with the setup I gave you'll more times than not walk away with 4 or six ticks, so descend from highest to lowest in your 3 tier step.