[drsushi]

email,

I may have been a little unclear in terms of the stop strategy. I agree that the volatility could kick one out a lot. I by no means am an expert and am still learning. Much of the info I was sharing I have learned from the google group. I think the intent of the strategy is to place a stop above a previous high or below a previous low depending on the direction of the trade, of course. In the group they discuss using 3 time frames. The longer time frame gives general trend and the lower timeframe give the trade setups and an even lower timeframe is used for entry. The main method discussed in the group is the use of the 777tic for trend, 110 tick for setup and 16 or 8 tic for entry. Higher timeframes such as a 60 minute or 240 minute etc are used as well. One thing that is emphasized a lot is that if you see a double top on the 110 tic and then a lower high on the 110 tic you that would indicate sellers taking control. Assuming the trend is down that day you could enter short with a stop above the previous high wich may be no more than 2 points. Please don't shoot the messanger. This is what is taught/shared in the group. As far as exits go I've read concepts of scaling out in thirds or quarters mainly from the Trade the Markets guys and the theory is that the sooner you can move your stop to break even or break even minus a tic or two the less risk you have. If you scale out in thirds at 4 tics for the first third, 6-8 tics for the second third and open target on the last third with a stop at break even after the second target, even if the last third scratches you have a profitable trade. That is the theory. Is it a good one? I don't know. I too would rather hold for 5, 6 or 10 points. I would love to hear about other exit strategies. One thing I was thinking of would be to take a 100% fib projection from the prior swing as a first target and/or a 127.2 extension as a target. I don't like the idea of limiting myself to a 1 point or 2 point target, but it does seem smart to scale out and limit the risk as quickly as possible. If you get a runner or even 6-10 points on your last third that is still pretty good, isn't it? Let me know.

If you want me to post a chart of example trades let me know.

David