So I resisted starting this thread initially, but for whatever reason, felt like sharing today.
In my pursuit of a better exit strategy (as evidenced in my time at the WRB thread) I've looked and re-looked at just about everything - Fibs, pivots, trailing, fixed, etc. etc. And for me, I came to this conclusion - simpler is better and taking small bites out of the market is much easier than trying to devour the elephant at once. Yes, we'd all like to take one trade a day and let it run on trending days and stay out during chop or whatever, but you don't know what type of day is ahead of you till after the fact. And since you can't win if you don't play, that's no use to me.
So I went back and forth on this topic over and over recently - the topic of how/when to best exit for me and my trading methodology. And while I had been using a +2 point target before and during my WRB analysis, one thing stood out and the
light went on - getting +2 on my trades with no risk to my initial stop was pushing the limits some days. Some days +2 is just not there. And then I realized that +1 - +1.5 was very achievable time after time. So then I asked myself if those extra ticks were worth the additional risk and stress to get. I of course thought probably not.
And then after realizing that taking +1.25 was achievable over and over, and then realizing that sometimes you just have to jump back onto a trade if another valid signal arises, I was able to become more nimble this week, esp today (Wed 6/6).
In a nutshell, I found for me that taking LESS in profits MADE me MORE money (at least this week and some previous backtesting). I realize that this could blow up in my face at a later date, but I'm going on record here with my observations. The WRB thread helped immensely not b/c I realized that WRB's are not going to work for me, but with the comments others made, esp in the last few pages, I realized that I could take less in profits each individual trade and make more money each day. Or it at least has the potential to do so.
The downside - some would say that I am 'over-trading' now. And at first glance, I get that. But if I told you that I could show you a way to make some money every day in the markets taking 3-7 trades or you could possibly make substantially more but would require many, many more trades (more on that later), would you be interested? I'm all about maximizing my work time. If I could take one trade and make a ton of money, I would. I have not found that however. What I have found is that for me (and this might not work for you, so please keep that in mind) taking multiple trades during the day and going for realistic targets is much easier. And to be perfectly honest, it's more fun. I'm active all day and really feel like I am doing my job. I don't know about others here, but taking 1 or 2 trades a day when you are a daytrader sucks. I know that if that works for you, then great and all that stuff, so please spare the lectures on why taking 1 or 2 is better. If it works for you, great, start your own thread.
I've attached a couple very, very simple scenarios of how I have seen this way of trading work better for me. Please bare with me as these were drawn using
SnagIt and I did it quickly for purposes of sharing here.
Scenario 1 - Tending Day
Scenario 2 - Non-Trending Day
Basically, by going for more realistic targets on the ES, my profits are taken out much more often and being flexible provides a way to get back into a trade if need be.
The key for me by looking for smaller targets is that on choppy or more range bound days, I can actually take some profits out of those moves. By going for +2 and/or a WRB, it wasn't always there on some of those days.
That's probably enough for now. I could go on and on some more, but I'll try to post some updates/stats of how things are going here. I would strongly suggest to those looking for a possible exit plan to consider bringing your targets CLOSER vs. going for more!