age old delima... but I struggle with it... I trade NQ off Bar charts with 2 moving averages. I exit when I get a bar closing outside of my current move Under for longs... Over for shorts...so I am both entering and exiting off structure. The thing is that I have alot of trades that might be positive NQ 7-10 points and end up being break even... I could just scalp 2 or 3 trades and call it a day Of course I get big runners,,,but especially now that summer is here I am asking myself if I should change. comments? thoughts?
John9999, I understand your difficult choice. I also, struggle with the same thing daily. Should I just take the 10-20 ticks, or wait for the predetermined next level (resistance or support) to break and trail behind the trade for bigger profits, which gives decent R:R. It sort of a personal decision and what makes sense to me. After some thoughts and many thinkings, I decided, I will only exit the trade if I think price is going the other way or out opposite way of making money for me. I do not like exiting a trade, only to see it go up more ticks and more money. I decided to only exit the trade when i think price is going the other way. I try to get all the money.
"Runners" is reverse position sizing. You're ensuring that the market will catch all your losers while holding your largest position and your lightest size when you're the most right. It's bad math. Don't do it. It forces you to have higher winning pcts (as it pulls down your avg gain per trade) to make up for losing heavily at the very start of trades WHEN YOU HAVE THE LEAST AMOUNT OF INFORMATION ABOUT THE CORRECTNESS OF YOUR INITIAL DECISION. Either go all-in / all-out or start with your lightest position and add to winners as the trade goes your way.
We would all love to have "one size fits all", we can average down if you are extremely knowledgeable on charting and swing definitions, or you can average in and add to a position on so many points up. You can design your method to have 1-3 chances for trades or design to do 100 trades a day. Or you can do your other hobby of 99% of the time concentrate on risk management and back testing, one of the tests I find interesting is testing by the contract months March, June, Sept and Dec. You should learn to luv stats and probabilities over decade(s) of data. For myself, I take off half at a makeable amount by checking the MAE and MFE, then bit out based on todays/yesterdays high/low and runner out on the close. Really comes down to your work than asking other traders. I don't add to winners like so many ticks beyond but do have many ongoing signals and each is managed on it's own signal. Good luck.
Most of the time, it's going to chop, so scalp out, most of the time, that's the right thing to do, don't be disheartened by the very few that break out and go huge, they are few but they sting like there constant, if you don't many small losers, obviously if your lucky enough to hold through the break out, then sit on your hands and see!!