Stops for the ym?

Discussion in 'Index Futures' started by musclext, Apr 7, 2009.

  1. musclext


    I just started papertrading the YM but it really confuses me with the trade managment! My entries are very good but my stops r so-so. Can any one please suggest how I should trail my stops?
    Thank you in advance!
  2. Here are a few ideas for you to consider:

    1. You can use pure price action and use the prior swing low if you are long or the prior swing high if you are short.

    2. If you are long, you can use the low of three bars back. Vice versa if you are short.

    3. You can plot parabolic and trail your stop one or two ticks below it if you are long and vice versa if short.

    4. Many software programs, like Ninja or Trade Navigator, let you easily program your own trailing stops. For example, once price moves one point in your favor, you can automatically bring your stop to break even, then trail your stop by 10 ticks. As price moves in your favor, you can progressively tighten your stop to 5 ticks or fewer to lock in profits. These 2 software programs have video tutorials that provide more ideas about how to program stops.

    It seems that when we first start trading, we are just looking for a good entry. Once we find that, we realize that we need good stops. Once you learn how to use stops, then you realize that you need to set targets.
  3. A stop is really a risk management mechanism, so guess you have to balance your risk management with the technicals. If I had to prioritize, I'd probably err on the side of risk management, rather than swings, support/res, etc. If you can afford large drawdowns, then this becomes less an issue (you can live to trade another day).

    But I have the same problem (it's a learning process). In fact, because of the volitility in the YM, I'm considering not using a stop (emphasis on considering ...). Need to evaluate.
  4. musclext


    Thanks DrPepper for your recomendations. There is one problem with using the prior swing low on the YM, before the major move, I noticed that it takes out the prior swing low (on the 89 tick chart) before it heads for new highs!I have been trading stocks for over 15 years and I am pretty good with my entries and targets but with the YM, it really confuses me some times!
    Thanks again!:confused:
  5. musclext


    Kandelkid what do you mean "you r considering not using a stop",what if the position goes against you! You have to get out ,how many points r you going to give it? I know people that have a 20 point stop! but 1 lost wipes out 3-4 succesful trades! That for me is not normal.I am going to have to continue practicing and will see! Thanks Kandlekid.
  6. YM follows the ES

    those are just stop runs on the YM, because stop runs are easier on the YM
  7. musclext


    I like your parabolic idea! I will try it today! Thanks again:D
  8. musclext


    I noticed that the YM doesen't have the volume of the ES, you mean that the ES doesen't react with the same manner?