Using both Hard & Trailing OTO Stops: ideas?

Discussion in 'Order Execution' started by KCalhoun, Aug 20, 2021.

  1. KCalhoun


    I'm going to extensively test a combination approach - any thoughts?

    Using OTO conditional orders like this:


    Goal is to hedge bets so at least one wins
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  2. Pezza


    Ok like the idea and premise? how has this been working for you?
  3. %%
    Could work well in AUG,SEPT, especially since SQQQ + plenty of inverse ETFs are up from JULY lows.
    Most [80% or so]of my buy or sell stops are GTC. SCHW names them Good Until Canceled.
    KCalhoun likes this.
  4. KCalhoun


    For daytrading stocks with trailing stops, key variables to test include

    Market/big picture:
    - time of day, day of week, current 3day trend, in vs out day, trin, vix

    - pattern, minor 2dh gap continuations are best
    - size of trade
    - amount to use (.2 - $1) for trailing stops, historically I've used .50
    - # of trades I expect to make that morning in the stock: just 2 or as many as 6-8..... use tighter ts if many trades
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  5. KCalhoun


    test setup OTOCO

    all or nothing trail vs hard stop setup, if i have it right:

    Last edited: Aug 22, 2021
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  6. KCalhoun


    here's my initial draft framework; i'll post test results periodically, lmk if any ideas, thx

    aug 2021 tests +-o

    OTO trail stop tight/.4:
    OTO trail stop wide/lod initially, then tighten:
    OTO hard stop tight:
    OTO hard stop wide/lod:

    OTOCO b=sell limit/target c=hard stop:
    OTOCO b=sell limit/target c=trail stop:

    Plus momentum scalps with tight .2 type hard/trailing stops.

    After doing a few dozen test trades I hope to narrow the OTO trade setups to the 2 most successful...... then drill down and test variants.

    Note nothing to do with chart patterns, it's all math and trade management.
    Last edited: Aug 24, 2021
  7. KCalhoun


    Test: OTO with tight trailing stops .2

    Outcome: down $220 for 38 stock daytrades. Most were 100-200 shares.

    Lessons learned:

    - looser stops wouldn't have helped, except for TKAT, had small win but missed big multipoint move

    - most wins like CCL were pivots.... slow choppy day
  8. KCalhoun


    In dozens of daytrades this week, lessons learned:

    Trailing stops did better than hard stops. The key, and this worked surprisingly well, is to start with a. 2 or .3 trailing stop, then tighten to .05 or .08 after it's gone up ..4 or more.

    Works best on outside days during first and last hours only. Not to use on choppy days nor lunchtime.

    Eg stock ABC is 20.9 on the open. I put in OTO order to buy 400 shares at 21.2 with OTO trail .3 stop. Once it gets to 21.6 I tighten trailing stop to really tight like .08

    Key tip: I often set up a sequence, ladder of OTO trades eg 21.2 21.7 22.3 22.6 . Throwing lots of darts, good to use really tight trailing stops, to hedge, since you get a lot of breakeven and small wins and stops along with decent wins.
    Last edited: Sep 1, 2021
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  9. %%
    I like traling stops better, for real good trend also;
    except sometimes use profit targets, like SEPT sometimes.................................................................................
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  10. KCalhoun


    Another red day, -328 with 104 trades

    Lessons learned:

    + Stop overtrading.

    + Only trade outside charts, eg above prior days high. I took too many shots at decent but not great setups.

    + Great tight stops well taken, but death of thousand cuts since choppy day. Looser stops would not have helped.

    + Don't trade 11-3

    Action items:
    - Turn off monitor at 11 for a week
    - limit to 10 trades/day unless exceptionally strong volatility
    - instead of 100-700 shares/trade, I'm going to 50 shares max, unless rockstar charts
    - tighten daily loss max limit from 500 to 150
    Last edited: Sep 3, 2021
    #10     Sep 3, 2021
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