Brooks feels risk should be minimum...i never used to use his stops he suggested because i was sure they would be hit. but i am trading the casino way now....keeping the overall odds in my favor and tolerating losses, ensuring that they are small, at the risk of whipsaws. if you see the emini i noticed, correct me if i am wrong, that there not many whipsaws that trigger stops and then continue merrily in the original direction. maybe that is why Brooks prefers tight stops
i have been trading many set ups just to see what happens..... however i have been blindly holding on and not booking profit even at 4 R..... Monday i will get out at 2R.....and see what happens. if i make a great many profitable trades...it may show that Brooks is right .....he does advocate target at 2R
you are obviously a matured trader. your advice is very much appreciated and enthusiastically solicited because it may help newer and struggling traders.
In certain scenarios like MTR brooks advocates tighter stops because these have about a 40% chance of working out into a successful trade and they may fail several times on the entries before a trader manages to catch one that works. So SL's are tight to render a trader the ability to take several hits until he gets on board with one that does succeed. He actually suggest that a novice trader learn to trade MTR first because you may lose several times before you hit the homerun but when you do hit it right the reward is bigger than with high probability trades. Usually, you will get an intraday swing trade with two legs or more.
absolutely correct, both statements 100% automation is very challenging task. More realistic goal is human+algo. Those how are old farts like me remember movie ‘Robocop’ and understand the difference between robot and cyborg. In trading world cyborg can be symbiosis of human (who analyses context and decide whether algo should be activated or not) and algo (execution and managing risk of opened trade).
you sound like brooks. that does not mean you will not lose a trade......only that you will keep the edge
if you see my trading friday you will see that....i lost trades whole day and made up everything-almost- with one huge winner