Tight stops and re-entries, or wider initial stops?

Discussion in 'Risk Management' started by KCalhoun, May 7, 2022.

  1. KCalhoun

    KCalhoun Sponsor

    What's your style?

    I play tight af, eg .06-.25 for daytrades, 2 points for swings.

    Example daytrading, I buy 23.6, it just goes to 23.8 and drops. I take sl 23.5, rebuy 23.6, sell 24.3
  2. maxinger


    It depends on the market conditions and the products.

    Eg for day trading NQ, my usual stop is 10 points.
    When the market is violent, my stop could be 20 or 30 points.

    For day trading hangseng, my usual stop is 25 ticks. When it is violent, my stop could be 30 ticks
  3. What do you guys use for ES? I have been trying 5 tick, 10 ticks and 20 ticks, depending on how volatile it is. I like those trades that go straight to target and never retrace, but the ES is about to drive me up a wall with how much it retraces. I'm currently trying to only place trades when a trend starts so that I avoid all the whipsaw. With a 5 tick stop loss, within a matter of minutes you can rack up a lot of losses when the ES is chopping around if the target is far away and you re-enter over and over and over and over again, stupidly (I really hope I've learned that lesson). I haven't figured out how to make the reverse happen....small targets and no losses and just rack up the profits. Maybe because I can't let myself try it with a large stop loss.
    So, I am trying to watch for getting in on a push that I HOPE won't retrace. Seems much harder to find those on ES than NQ, but every once in a while I get them. Just have to be more patient, maybe?

    Also, I tried using 2 contracts in demo this week and that really helped. 1st target is small and I try for the first push and then move the stop loss closer, or maybe to BE and then hope the 2nd doesn't get taken out. When it doesn't works, it's a two contract loss. When it does work, it's really great. :D And it all boils down to picking the best trade entries. High momentum, no retracements and not missing the entry point is what I strive for.
    Last edited: May 7, 2022
  4. mikeriley


    Depending on the time frame, there's always a retrace.
    I've found it's better to plan for it, and use it as a strategy.
    Therefore, I use wide stops using two accounts.
    1st account initial direction - 2nd account prepared
    for retrace.
  5. Interesting. I'll have to give that some thought.
  6. Is this the general idea? If you make some on the retrace then you can easily stay in the original position and even keep a wider stop loss.

    Not sure I'm ready to trade like this, but it does provide another option besides going crazy trying to avoid trades that will get retraced. :D

    2 accounts.png
    Last edited: May 7, 2022
  7. mikeriley


    Technically No, Initial position has a stop loss. When it's
    hit the 2nd account trades the retrace. I double up,
    and sometimes triple up on the retrace trade.

    Trying to trade 2 positions at the same time would
    raise my already high blood pressure. :wtf:

    You can do this on one account. But I use
    two as I have another strategy if it decides
    to go back in the initial direction.

    (No wonder I have high BP)

    Hope that helps.
    studentofthemarkets likes this.
  8. Thanks! Glad you stopped me before I tried this live!!!:D I thought the chart looked good!!
  9. I think I see how taking off and adding contracts throughout the day could help with the retracements too. Here's another chart showing how it might be done. It's not what you were talking about. I think if I doubled then tripled up after losses I would get high blood pressure....or worse.:caution:

    Adding and subtracting contracts.png
  10. There are so many different ways to look at the market. Each way has its strengths and weaknesses. I believe consistency requires an additional edge beyond any single methodology, especially as market condition may change over time.

    #10     May 7, 2022