[cuttshot]

b4gt,

There have already been some good responses to your post. I would agree with some of the earlier responses in that you need to have a plan before you get into the trade. That plan starts with having a system that tells you where you are going to get in and then where you are going to place the target and stop. If you wait until you are in the trade before you decide your exit strategy, you are going to be influenced by other factors (emotions, direction of the overall market).

One indicator that might be useful in determining your targets and stops is an ATR (average true range). Typically the default length setting is 14. This could give you a starting point for your trade profile. For example, you could target 2 times the ATR. Obviously you will have to do some testing on the different markets you are looking at to determine the settings for the ATR (2x atr for target? 3x?).

You will also want to come up with a stop management plan for the trade. You might decide that once the trade goes into profit by 1x the ATR value you move the stop to break even. This way you have a road map to guide you through the trade.

The only way you will see consistent results is to have a plan in place and stay disciplined to that plan.

Hope this helps.
Cuttshot

[bakrob99]

Originally Posted by b4gt »

Here is a recent example. I got into this trade at 26 June @14.99€ and my stop was hit at 10 July @15.26. To this one I invested the sum of 994.61€ and got back in return 999.52€. That means 4.91€ profit. The day before after the close I had something over 75€ profit. This I consider a fair trade since at least I didn't record any loss.



The reason that I put the stop loss at that point is because I was watching the rest of the market going downwards and I thought that if it was going to fail with such a big candle then it deserved to die.

This thing has happened a few times so I would like some advice how to maximize profits in such conditions?

If you are going to hold positions overnight - then you need to have your stop considerably further below the price action than shown on your chart. You put your stop loss at a point which is commonly support and a good place to enter long. If you can;t afford to have aa bigger stop - then REDUCE YOUR SIZE and TRADE SMALL until you learn to place your entries and exits at the right place.

[natedredd10]

Originally Posted by b4gt »

Unfortunately I am the kind of guy who must shoot his foot to learn to operate a gun.

No..you are very fortunate as far as an initial mindset goes with this line of thinking.
You are going to shoot yourself learning there is no way around it, all you have to do is not shoot yourself in the head as you learn and end the game. You also just have to stay in the game long enough for your self inflicted wounds to heal and not give in to the "pain". You will either learn or you won't but at least you will give yourself a shot.
Stops below/above a swing low/high is about as good as you can expect right now.
Being put on tilt because of a single loss is something that takes practice and gets less and less the more you are put on tilt. You can read all the psychology nonsense you want but the only way to train your brain really is to lose money many many times when you think you are correct. Almost any kind of gambling that you can gain an edge in is better than markets because of the cost..micro sports betting account, micro poker account..
My niece is due in the fall...As soon as she has a concept of money I'm going to start training her to be a trader. Put a small amount of glue on the tail side of a coin to make it unfair, she is always heads...Give her 200 bucks in a piggy bank that she can only bet vs me in this unfair coin game in her favor and drive her nuts with random streaks betting 10 cents a flip...

[AmCan1]

This is an interesting thread. It is talking about how to exit a trade, which in my humble view, is the 'artsiest' part of trading. One of the posters said that he doesn't want to scale out because it complicates his record keeping. No offence, but that seems like the wrong reason to make, what I would consider, a very important trade decision. If you want to simplify the record keeping, enter them as seperate trades. That's like saying, I don't want to backtest because it takes too long.

I backtest a lot. I use tools to do so and track my trades in a way that give me meaningful results. Then I am in a better position to craft a tradeplan, which would include my means of exiting a trade. Typically, I'll exit at a fixed target that I have established as having good odds of achieving (based on my backtesting), and then I'll either go for an even larger fixed target on part of the remaining position and/or trail a stop with the rest.

I use simple trailing stop strategies that are dynamic, not static. In other words, I want to work with the current market volatility vs. an artificial parameter that might not have anything to do with current market conditions. So for example, rather than trail a stop behind some sort of time limit (2 days back, for example), I will work around the current swings, or trail some sort of momentum indicator, or something like that. If I get bumped out of an extended move prematurely (lets face it, there's alwasys a tradeoff between a stop that is too tight and a stop that is too loose, and you'll never get it perfecty right every trade), then I'll look for some sort of chance to get back on board and renter the trade based on the rules that my very robust tradesystem allows for. I don't need to squeeze every pip or tick out of every move. I just want the high percentage meat and potatoes part of the move. I then post my trades in my spreadsheet and track my results so that I can fairly assess my trading, objectively. From that I learn, gain experience and confidence and my trade exits improve over time.

One thing for sure is that I want to know how I will exit a trade before I even get into it. I also know that it will not be perfect and I am at peace with that.

[EsotericRule]

b4gt...if you are not on a trading floor, scrounging for 1/4s of a point, then you are a speculator. New speculators using a yearly chart, rely on daily, 2 day and weekly readings. When using a daily chart, new speculators use 10min, 30min and hourly charts. Those are basics for a new speculator.

Using common indicators on common settings will result in common (and less than common) results.

Use bollinger bands set to .8 deviation to show you when an issue is trending and where. You can use this as a simple entry, protective stop, and end of run setup.

Use (and get creative) with the so-called 'fibonacci' extensions and retracements. 95% of traders use them incorrectly, thus my admonition to get creative.

What was the reason to buy/sell? Was the price action stronger/weaker than that of the index and group in which it trades? Was there a rare event? Was the issue making new weekly highs or lows? Historic highs or lows? IOW...did you have a plan before you even got into the trade?

As you are new to speculation, remember - the issue is not about picking tops and bottoms...its about retaining profit. Profit may not always be right, but its never wrong.

PS - it is not a crime to be under capitalized. I started out being undercapitalized and playing around with penny stocks. I survived by taking profits when they occured and ran 2k to 50k in a year with two good picks, 7 so-so picks and 15 duds. Don't marry any position, date it for awhile and move on. Nothing keeps you from coming back to an old flame if you leave on good terms.

PPS - study a bunch of 1 year charts, set to the daily time frame, and without any indicators. See if you can find similarities in any of the patterns.