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LOL. Clearly no method is without some negatives.
First, do you scale out, or exit all the position on the first WRB? While one needs to do what fits their individual personality, the idea is once the first pt is hit, all other pts MUST be higher than the first. So if price does move in the opposite direction you would NOT be exiting at further WRBs.
Now as for the trailing stop. I would place it 1 or 2 ticks from the low of the body. As long as the that is not on an even number or a round number. More correctly, 1 tick below unless that is an even number or a round number (which of course, is even). If it was, then I would use 2 ticks.
I don't know what happened in this chart, but it looks like you would still be in on the last bar shown. |
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OK let me see if I have it - first, you exit some of your contracts on the first WRB. Your trail stop is placed 1-2 ticks below the body on the remaining portion and either another WRB will form later or that trail stop on the remainder will be taken out... correct? And how long are you willing to wait for that next WRB? You could easily have a stop that would not be in jeopardy of being hit, but also not get a WRB shortly after the first. In other words, if price just slowly chugs up and down far enough from your stop, but not enough to create another WRB, what's a trader to do? Just sit and wait? At that point, I think that's more hope than anything... Just my view though.
It's kinda funny how our views and ideas can change over time... With WRB's as exits, I am getting in, getting out and waiting for the next set up. If you have multiple WRB's or set profit levels, you can stay in a trade for many minutes or even hour(s). I used to do that - sit and wait b/c my profit level was +20 and I wasn't budging till then. For me, this is a much better way for me to trade as I am not always the most patient. So, instead of getting into a trade and feeling like it is taking forever for my profit to hit, I am simply looking for a boost of volume in my direction and then exiting the trade. And while it does create more trades during the day, it keeps my attention more and with more round turns, I can keep negotiating that rate down. :p