[tradingkevin]

I have a suggestion for exiting.

enter with 2 units ( 1 unit could be 1 contract or 10 contracts or 100 contracts..thats up to your capital and risk i.e. max 1 to 2% of total capital)

exit unit 1 at 4x your initial risk whatever happens ( so even if wrong on second unit, the unit 1 will cover the loss on unit 2. example. risk 5pts initial risk. 5 pts x 2 units ( 1 cts per unit in this example) = 10 pt initial risk. If you exit unit 1 at 5 pts x 4 ( 4x initial risk) = + 20 pts profits. if you are wrong on second unit then + 20 pts - 5pts = + 15 profit. now if you are wrong on your entry you would get - 10 pts. but since you make a minimum of + 20 pts per entry you are still working at a 2 to 1 reward to risk which is not too bad ( i.e. you can be 2 times wrong and still be break even )

Exit unit 2. exit at minimum 8x your initial risk. that s a target but once it reached that level, you can do 2 things. exit right there or trail it since market is showing lots of strenght ( i.e. each new bar is big and full ...not much shadow on the candles ) . it's a judgement call.

Now if you exit unit 2 at minimum of 8x risk that would be 5 pts x 8 = + 40 on unit 2 and + 20 on unit 1 = +60 total profit for a risk of 10 origianaly . 60 / 10 risk = 6 reward to risk factor. so that means that for every trade you take, you can be 6 times wrong and still be at break even ( not lossing anymoney ) . This is a very favorable R/R factor.

You cannot control anything in the market but using this simple technique gives you confidence and a frame work to work with for you targets by putting the math in your favor. YOu can play areound with the Risk multiplier to... If for example your risk is +10 per contract and the the average swings are about 20 to 30 pts, you might lower your 1 st target to maybe a 3x risk or 2 x risk. and on the 2nd target a 5 or 6 x risk. that 's all up to you.


This idea is so simple that many people will overlook it but the simplicity of it makes it very stress free and builds your confidence over time since you know that you can be 6 times wrong and still not loss money for every trade that works out.

[walterw]

Originally Posted by tradingkevin »

I have a suggestion for exiting.

enter with 2 units ( 1 unit could be 1 contract or 10 contracts or 100 contracts..thats up to your capital and risk i.e. max 1 to 2% of total capital)

exit unit 1 at 4x your initial risk whatever happens ( so even if wrong on second unit, the unit 1 will cover the loss on unit 2. example. risk 5pts initial risk. 5 pts x 2 units ( 1 cts per unit in this example) = 10 pt initial risk. If you exit unit 1 at 5 pts x 4 ( 4x initial risk) = + 20 pts profits. if you are wrong on second unit then + 20 pts - 5pts = + 15 profit. now if you are wrong on your entry you would get - 10 pts. but since you make a minimum of + 20 pts per entry you are still working at a 2 to 1 reward to risk which is not too bad ( i.e. you can be 2 times wrong and still be break even )

Exit unit 2. exit at minimum 8x your initial risk. that s a target but once it reached that level, you can do 2 things. exit right there or trail it since market is showing lots of strenght ( i.e. each new bar is big and full ...not much shadow on the candles ) . it's a judgement call.

Now if you exit unit 2 at minimum of 8x risk that would be 5 pts x 8 = + 40 on unit 2 and + 20 on unit 1 = +60 total profit for a risk of 10 origianaly . 60 / 10 risk = 6 reward to risk factor. so that means that for every trade you take, you can be 6 times wrong and still be at break even ( not lossing anymoney ) . This is a very favorable R/R factor.

You cannot control anything in the market but using this simple technique gives you confidence and a frame work to work with for you targets by putting the math in your favor. YOu can play areound with the Risk multiplier to... If for example your risk is +10 per contract and the the average swings are about 20 to 30 pts, you might lower your 1 st target to maybe a 3x risk or 2 x risk. and on the 2nd target a 5 or 6 x risk. that 's all up to you.


This idea is so simple that many people will overlook it but the simplicity of it makes it very stress free and builds your confidence over time since you know that you can be 6 times wrong and still not loss money for every trade that works out.

Thanks Kevin for the input, that would be truly a mathematical money management of the position, makes great sense from a RRR stand point of view...

I think it will work better on trending conditions, you need a trend to make this swings so you can get this x4 an x8 etc... so if momentum conditions are present I would suggest paying attention to this posible money management aproach...

If the market is in cycle mode, it will be dificult to have so hi 4x or even 8x RRR... so maybe you could lower it to a x1.5 and all in one 1 unit ( no runners ), because there is no running conditions to hold a runner...

thanks for inputs, please keep interacting, I will post soon some new technical exit techniques.... cheers Walter.

[walterw]

Here are todays first 50 minutes of flip trades.... already made $100 for the day... (with this technique yet on virtual money) cheers Walter.


PD: I took off the 34 ema, less noise on chart.

[tradingkevin]

I agree with what you said above but I think it also depends on ones initial risk and the average swing size.

If you initial risk is 5 pts per contract and the average swings are between 15 to 20 pts then a 3x or 4 x risk is possible on your first target... now if your initial risk is 10 pts per contract then a 2x risk would be more appropriate for the first target...

[tradingkevin]

Originally Posted by walterw »

Here are todays first 50 minutes of flip trades.... already made $100 for the day... (with this technique yet on virtual money) cheers Walter.


PD: I took off the 34 ema, less noise on chart.

=======

Which way do you know to trade i.e. long or short ? is it based on the trendline ?

[walterw]

Originally Posted by tradingkevin »

I agree with what you said above but I think it also depends on ones initial risk and the average swing size.

If you initial risk is 5 pts per contract and the average swings are between 15 to 20 pts then a 3x or 4 x risk is possible on your first target... now if your initial risk is 10 pts per contract then a 2x risk would be more appropriate for the first target...

yes Kevin, 5 ticks could be the average stop on this time frame of 55 Ticks... taking a stop on a swing of the oposite failed pivot... so you would be looking as per your aproach for 15 to 20 ticks... well on russell you need momentum conditions for that kind of movement... if you have momentum, wich I use to read it on a 110 Tick chart with a keltner band 50 exp 3.5 atr, ( see example) being outside the outerbands (momentum conditions ) this 15 to 20 ticks target would perfectly apply....

if dont have this momentum condition (inside keltner), you will sit and wait for a move that is very unprobable.... so here we should have a diferent plan to take just a small scalp return.... we know statistically that the market will not travel 15 to 20 ticks on my favor.... so maybe taking 6 to 8 ticks will be a good exit... wich would represent a 1.5 RRR.... but you have there a nice overall performance of the flip technique....

So exits should be treated diferent depending on momentum conditioins...

any way your idea of taking a fixed target from a mathematical RRR point of view is valid, I think the RRR target should be adapted depending on the momentum conditions.... say x1.5 or x3 or x4 etc...

I atach 110 Tick climate detector chart... with keltner 50 exp 3.5 atr....

cheers Walter.

[walterw]

Originally Posted by tradingkevin »

=======

Which way do you know to trade i.e. long or short ? is it based on the trendline ?

Kevin, here I attach an excel explanation... tell me if you understand it... cheers Walter.

[walterw]

For the greedy lunch traders here we have the lunch coil been broken with a nice flip... the most tested level is the one in this case we take into acct...

cheers Walter.