[Northern boy]

simply put i think trailing stops is the wiser substitute for scaling out.

a r:r of 1:3 in a random market will obviously succeed. the market's not random but it's not against you either (so long as you're not a crowd :p). Scaling out is kind of like creating a new position in a new circumstance you're now uncertain of.

but yeah, as it was said, scaling out can only neutralize your r:r ratio imo. just trail it.

[Northern boy]

Originally Posted by smwinc »

Perhaps I wasn't clear.




2. "enter the market. mental stop on price action/fixed stop I always use. No target because I don't know what the market will do, ever."

actually that's better put.

[Paul71]

Originally Posted by DbPhoenix »

Judging by your posts here and elsewhere, you appear to be fairly new, and much of what you want to know may become clear as you become more experienced (I'd like to say "will" become clear, but that is often not the case). Issues of nearby rewards and tight stops and trailing stops and risk:reward ratios and where do I enter/exit and how I do I distinguish up from down are among the most common puzzlements that beset beginners and are all a consequence of their not knowing just what it is that they're looking at.

Once you understand what you're looking at and become familiar with it, you should be able to determine the best entry for your risk tolerance, and you will have defined what constitutes a reversal signal (I say "should" because many people never do). Once that's accomplished, it's simply (but not necessarily easily) a matter of entering when you're supposed to and staying in until you get your reversal signal. At that point, all the issues regarding stops and r:r and cutting profits short and so forth will for the most part evaporate.

Hi DB.

Good post, and may i say, i'm enjoying reading your 'work' again.

I suppose true risk lies within a traders own understanding of supply and demand, greed and fear, market psychology, strength and weakness, price action, support and resistance.

People/traders often argue about 'the numbers', different ratios and so on, but this is only in context/reference to thier own ability, and to a certain degree, has no real relavence or bearing to anybody else, or dare i say, even the market.


Good to read you again, DB.

[DbPhoenix]

Originally Posted by Paul71 »

People/traders often argue about 'the numbers', different ratios and so on, but this is only in context/reference to thier own ability, and to a certain degree, has no real relavence or bearing to anybody else, or dare i say, even the market.

Or even to the trader. The trader really has no idea what the risk/reward "ratio" is, only what he hopes it will be. And I suspect that many traders stay in losing trades because of the reward that they are sure they are going to receive.

I suggest, therefore, that beginners focus on the risk, then stay in as long as the market allows them to.

[BlowFish]

Im surprised no one has directly mentioned position size. If you enter at X and determine Y is a good place for your 'technical' stop based on market structure (for example above the last swing high) you are now in good shape to determine your position size based on how much you want to put at risk.

The key metric (imho) is risk of ruin. My favourite site that talks about that is http://www.traderscalm.com/ Im not affiliated just thingk its a great little site and free to boot.