[wsam29]

I've been messing around with moving my stops to BE +1 after the market has moved so much, even if my exit target is not hit.

Example.

10 tick stop for YM
profit target of +11
YM moves +6/7 for me, I move my stop to BE +1, +1 to cover cost of
commission.

I figure, if the market wants to move, it will move and hit my target, if not, scratch trade and some mental energy exerted for the day.

[Soultrader]

I have been analyzing my wins over losses lately. It seems like a winning trade takes mimimal heat: maybe 5 ticks at most. In a losing trade, price moves 3-4ticks in my favor, then I take about 7-9pts of heat, price moves towards my entry, and then I get stopped.

What I am thinking of is to trail my stop the moment I enter. I use a 10pt stop like you wsam29, so I may start trailing my initial stop until I reach my first target of 10pts. I scale out on all my positions so this trailing stop until my first target might be able to spare me a few ticks off every loser.

[wsam29]

I don't know if you're read "Studies in Tape Reading" by Richard Wyckoff, but he used very tight stops in his trades for stocks.

I mysely might even consider using a 5 tick stop, because the ratios would be 2:1 for me rather than 1:1

Jankovsky's book goes over the ratios of winning percentage and what kinda ratio you'll need to be a net winning trader.

[brownsfan019]

I would suggest one thing guys - make sure you test this theory before putting it into play. It's easy to find trades where this would have worked, but I am sure you can find trades where it took you out prematurely.

I toyed with the exact same thing you guys are and found for me it did not work. The reason being that it's very realistic for a trade to move in your favor, retrace a tad (and take your stop) and the continue the move in the direction of your trade. That happens a couple times to you and you will rethink this.

I've found that I need to give a trade 'wiggle' room. It's too easy for an aggressive stop to be ticked out. One thing you may want to consider - BE MINUS 2. The theory behind this being that if the price comes past your entry point, then you are wrong and want out. The price moving to BE + 1 does not prove that you were wrong, which is the point of a stop.

Just an idea.

And of course the other consideration here is that if the majority of your trades move to +7 or +8 and then retrace, perhaps it's time to adjust your profit target. Is 2 ticks worth taking heat on a trade and losing or making 1 tick before commissions? I don't know, you need to answer that.

[Soultrader]

I have personally found a 5 tick stop to be too tight and not enough room for a trade to work out. I guess it really depends on your entry basis. Because most of my entries are based on tape, I am usually able to use a fairly tight stop. I know immediately that if tape takes out level XXX, I am wrong.

Also, I find trading setups that will give me 10pts minimum. Most of them I aim for 20+ pts but I like to take half off at 10pts to eliminate my risk. My personal thoughts on a 11pt profit target for all position is a little to quick. Once again, trader preference depending on trading setups, style, and the number of trades a day.

[wsam29]

Just put my trade management idea to test.

Besides my first trade mistake to start the day, oh great, it worked out just great.

wanted to go short around 1010h, instead, I clicked the buy button because I got too excited. Hindsight says reverse trade and gone short anyways. -10

next trade, went long around trade went +7, move my stop to BE +1, stopped out for scratch trade

third trade, went long, trade went +7, moved stop to BE+1, closed trade for +8

finished the day -1 tick

to me that BE+1 is more a pscyhological trade, it's better the market pays for a scratch trade rather it come out of your own account because those commissions can sure add up and chew your profits to bits.

I was more willing to make another trade knowing the market paid for my scratch trade.

it really is the way that I trade that allows me to do stuff like this because it is not "set-up" based. I just identify volume contraction on a time chart and go from there. That happens all day long.

Besides, the mistake trade, I'm very content with this method of trade management, there is nothing else better knowing you have a risk free trade once that stop has been moved to BE+1.

either way I'm done for the day.

[brownsfan019]

Originally Posted by wsam29 »

Besides, the mistake trade, I'm very content with this method of trade management, there is nothing else better knowing you have a risk free trade once that stop has been moved to BE+1.

Winfred, I used to think that like as well - just get my trade to a positive position in the worse case scenario!! That can do wonders for your psyche.

Here's the catch ... Moving that stop is so easy and tempting that many of my trades were being taken out at +1 tick and these were later 'winners'. In other words, I turned a +10 pt trade into a +1. That will also do wonders for your psyche.

So, as I've tried to say over and over here, each trader must do what's best for their pysche and trading account. I can't do the BE+1 trade, it doesn't work for me. If you can get it to work and make money, that's great!!!

[wsam29]

"One man's meat is another man's poison."

To each their own the saying goes.

I'm just letting new trader's know because they try to mimick what everone else does, just giving them more ideas to play around with and make it their own. Been there, done that.

Like I said before, I don't have levels ahead of time to buy or sell at, I just look for periods of quiet and volume contraction. It's bound to move sometime when the price cools down. (its just another way of saying I enter on pullbacks, but sometimes prices do not pullback, they just chop around in a tight range with little volume and then expand, so hence quiet period)

Because that is what I look for, it happens all day long, getting a scratch trade to me is no big deal, and its no big deal if it takes me out and then ripes through the levels for a 20 tick move. Expect and accept that will happen. That is something no one can make you accept, it comes internally from the person themselves.

But because the BE+1 was paid for by the market, and if it and when prices do move, getting in is just another commission away. The only thing that was wrong was the timing of the trade.

There is no point if you cannot even trade a 1 lot to make money, trading more lots just gets you into more trouble if you have no clue how to monitor yourself. I had one week I went through that, its no big deal. The key thing is I'm still around with "chips" in front of me to come back.

Either way, there are so few topics under money management, *scratches head*, yet that is the holy grail to trading.

Entries are a dime a dozen. my ego could care less that it found a set-up that works X% of the time and it must let the world know about this amazing set-up. Heck, I know I can trade, I now need to learn better trade management methods to protect myself from losing my head and my money, again.