Discussion in 'Trading' started by Trader.Fighter, Jan 19, 2014.
Fixed target ?
Trailing of stop ?
Scaling out ?
Combination of trailing the stop and scaling out ?
Fixed target. Have exit criteria if prices weakens prior to target
That really depends on duration, if long/medium term stocks/commodities, am using weekly/daily bar charts and RSI(14) or TSI(3,14), at a very reasonable dollar target in stocks amount depending on value of stock is only target and take profit on half, going to breakeven plus a nickel on remainder(until stock has gone up 20%-then use hard stop GTC) but putting in protective stop fifteen minutes after the open, remainder of shares I look for divergence on RSI or in Price Action terms smaller break differences in prior pivots or extreme in TSI, when this occurs, I will wait for fifteen minutes before the last day of the week and if below last weeks low, exit all shares. In long term commodities, I hedge all positions upon entering futures' position, only target is based on margins required by exchange, take profit on half position, somewhere between where I take profit and enter, I exit my hedge for a loss and apply breakeven stops to take into account these losses. After I have breakeven stops in place, I never trail protective stops, backtesting has proven to me in my style of trading, for long term approach, the biggest moves would be cut short by trailing stops. When I rollover in futures, have to apply stops in dollar terms. In long term is where the "homerun" moves occur for me. Medium term trades are always add-ons for me and treat them as just another signal.
Day trading is completely different, have max profit targets that never get exceeded, but often get half the target cause of time stops(market should move so many ticks in so many minutes or bars), I do not use any protective stops day trading when first entered and I average down on all signals. I do not recommend to anyone to do this. At least half my trades are breakeven plus one tick on original entry. Most signals are reversion to the mean, but regardless, mental stops are all the same dollar amount. As I have aged, keeping low losing percentages mean more to me than profits, this produces calmer equity curve.
Time for Starbucks.
No stops, no fixed targets. Scaling out as the imbalance between demand and supply shifts from one side to the other. But you probably knew that.
I do use stops, just no trailing of stop.
I scale into my trades, sometimes in sometimes out.
No fixed targets.
Usually fixed target, but on occasion will take off most on fix target and trail the rest.
I realize I started the thread without posting my choice.
I like to let the market get me in, and take me out, so my choice is trailing stop with a combination of scaling out.
no scaling, trail to my profit target, keep monitoring the price, keep trailing until I see a dogi, spinning top or other indications as per my strategy and make an exit..
study trends ,,some more before exit.Time may be on your side;
unless one is overleveraged.
I like the way a parabolic stop slowly [psar] tightens over time;
but i seldom use one in a mindless mechanical way.
Let you profit run = trend indicator as a target
cut your losses short = fixed stop-loss
anything else is for very sophisticated methods, either discretionary or mechanical.
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