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

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

  1. Gambitman


    I don’t see how you can daytrade ES with stops less than 40 ticks. You need a break of your premise/idea to know you are wrong. With 40-50 handle moves becoming common you need to widen out.
    #11     May 7, 2022
    studentofthemarkets likes this.
  2. maxinger


    I have been using 12 ticks SL for day trading for quite some time.
    2 decades ago, I also used 12 ticks SL.

    when the market is very violent, I increase the SL by 2 or 3 times.
    I rarely use SL at 3X.
    When the market is so violent, the chances of getting STOPPED out are
    high. Also, my brain CPU is not powerful enough to handle such
    a market.
    Last edited: May 7, 2022
    #12     May 7, 2022
    studentofthemarkets likes this.
  3. Thanks for the feedback. 40 ticks makes sense because the 1 minute candles are sometimes about 40 ticks in length. That's a lot more than I was hoping to use, but I'm tired of being stopped out of good trades, so I'll take a look at this amount.
    #13     May 7, 2022
  4. Do you mind sharing what timeframe you're using where you can use a 12 tick stop loss? Thanks.
    #14     May 7, 2022
  5. maxinger


    My charts are all volume-based.

    I use

    > small volume 200V chart
    during the Asian & European sessions.
    Nowadays it hardly moves during the Asian session.

    > medium volume 600V chart
    during the US session

    > big volume 1800V chart
    also during the US session
    (with wider SL)

    Lately, a big volume chart is more suitable for the US session.

    Similarly, if you use the time-based chart,
    there is no such thing as one-size-fits-all time based chart.

    too short time frame - lots of fake signals
    too long time frame - you missed out on many opportunities
    #15     May 8, 2022
    studentofthemarkets likes this.
  6. danielc1


    The smaller the stop, the bigger your r returns can be. The smaller the stop, the more chance you have been stop out. There is a sweet spot: small enough to get 5 r or bigger, big enough to have a win rate above 30%, and before you know it, you have a holy grail system.
    #16     May 8, 2022
    comagnum and studentofthemarkets like this.
  7. Thanks for sharing this!
    #17     May 8, 2022
  8. heispark


    As a breakout trend following trader, mine is below the breakout candle or previous swing low on your trading timeframe. If they are taken out, mostly that breakout is a fake.
    #18     May 8, 2022
    studentofthemarkets and KCalhoun like this.
  9. SteveH


    Any decent trend on any timeframe is going to either be supported by the 10 or 20 ema. You avoid larger stop losses by staying closer to them for your entries. Typically, new trends stay to one side of the 10, then to the 20 as they protract.
    #19     May 8, 2022
  10. wrbtrader


    I prefer the word "volatile" or words "high volatility".

    Yet, I'm curious why some use the words "violent" in their description. It's as if crime is increasing in the markets and/or people are running out of financial institution buildings screaming in pain and yelling for help. :rolleyes:

    Another way or back to your word use, when the markets are "violent"... they're beating the hell out of traders and investors.

    #20     May 8, 2022