[ZenMachine]

Entered long with a buy stop, anticipating this is going up slow and steady. Got stopped out after 15 minutes...

There isn't much liquidity... shouldn't have entered.

[RichardTodd]

Originally Posted by ZenMachine »

First target hit, moved up stop to halfway point.

This made me wonder: Have you done some sort of analysis that says that price rarely hits the halfway point on the way to the second target?

[ZenMachine]

Originally Posted by RichardTodd »

This made me wonder: Have you done some sort of analysis that says that price rarely hits the halfway point on the way to the second target?

Thanks for asking.

No, it's just my attempt to protect the profit. I have a horrible habit of turning paper profits into actual losses, and am working on fixing it...

I've read, though, that some people use numbers like 50% or 20% as a guideline to place stops on profitable positions.
I myself never felt that this is a valid S/R point in my brief trading career.

[HAL9000]

Originally Posted by ZenMachine »

Thanks for asking.
I've read, though, that some people use numbers like 50% or 20% as a guideline to place stops on profitable positions.

Hi,

some people call a 50 % retracement an ambush,
so this would be an entry for them, not an exit.

Anyway, maybe you should think about placing your stop at BE, when
appropriate, and exit on strength, or, if you like your profit target, or if something stalls (price/time). Just think about it.

I guess Richard asked you, because of these 50 % retracement trade entries.

Maybe he will add something, or correct me.

Hal

[RichardTodd]

Originally Posted by HAL9000 »

I guess Richard asked you, because of these 50 % retracement trade entries.

Maybe he will add something, or correct me.

He had said 'moved up stop to halfway point' as if that were an obvious choice that required no explanation. So, I just wanted to get a sense of how much research had gone into that decision. Like you say, 50% retracements are so common that they are often considered entries, so it didn't make sense to me. I didn't want to criticize the idea without hearing the rationale, though.

The biggest mistake I see my clients make with stops is: they move their stop while thinking about their personal entry price. Of course, the market doesn't know or care where they got in, so they are cutting the cord between their stop placement and their analysis of the market. When they do this, they'd usually make more money by just exiting immediately at the better price, rather than putting their stop in harm's way. Though it's kinda a cliche, I suggest that people try to keep their stop in a place that they don't think price ought to reach... in other words, if price reaches the stop, it would invalidate their reasoning behind the trade. Easier said than done, with money on the line, I know!

[thalestrader]

I have been asked by many folks via PM and by more than one in direct posts to post entries/exits of my daughter's trades. I posted this over in the p/l thread in response to one of those requests.

This is not a live trade. My daughter is asleep, and we are both not trading anymore this week. But here is an example of the current USDJPY. This is how 90%+ of her trade opportunities look.

She trades for two targets usually (sometimes it is just one). This did not come from me, but from a friend who trades currencies and always uses two targets.

She looks for opportunities where the first profit target has a 1:1 or better ratio to the stop loss. Once that first target is hit, then she moves the stop loss to BE or the closest natural stop, whichever is, in this case, lower.

This is the trade, and it provides an opportunity 1-3 times each day for her.

Many, though not all, reach the first target, many of those reach the second target. A few never reach the first target and she is stopped out for a loss.

I think that the focus on R/R, money management, and trade management are as, and probably, truth be told, more important than how she enters and exits a trade.

Best Wishes,

Thales

[thalestrader]

Originally Posted by thalestrader »

I think that the focus on R/R, money management, and trade management are as, and probably, truth be told, more important than how she enters and exits a trade.

Best Wishes,

Thales

For example, ask yourself and answer honestly: If this were your trade, how would you feel right now? How many of you might be tempted to hit the "flatten," "close position," or "liquidate" button seeing that "bull candle" so that you could "lock in some profits"?

I can tell you what my daughter would: Not a thing. She'd just be waiting (probably reading a book) waiting to here the alert that tells her that one of two things have happened - either her first profit target was reached or her stop loss was hit.

How many here have the discipline and confidence to watch this trade to completion without any additional interference? I am not saying that this is not the beginning of a reversal that would stop the trade out for a loss. But this is a game of playing for profits, not pennies. If you cut every profit short, you will be certain of only one thing: Your average loss will exceed your average profit.

Best Wishes,

Thales

[diablo272]

Originally Posted by thalestrader »

How many here have the discipline and confidence to watch this trade to completion without any additional interference? I am not saying that this is not the beginning of a reversal that would stop the trade out for a loss. But this is a game of playing for profits, not pennies. If you cut every profit short, you will be certain of only one thing: Your average loss will exceed your average profit.

Best Wishes,

Thales

I used to constantly cut my profits short doing what you've described, but now, to be completely honest, it's just kind of irritating to do anything other than follow my initial stop and trailing stop plan...Too much brain work involved in doing anything else, I guess. I know that some here only trade a certain section of the day (usually the NY morning session), but I trade all day, and it is very taxing mentally to have to stay totally focused all day. If I actually had to "figure out" each trade as it was in progress instead of simply sticking to a preset plan, I don't think I would be able to do it. It would be too draining. As it is I often have a hard time staying focused all day and end up missing trades because I'm browsing the internet or going to the bathroom or something.

As an aside, I would say at this point, my biggest problem is focus. In the morning, I am usually still groggy from waking up, and eventually I get really hungry around lunch time, but I don't want to leave to get food because I don't want to miss a setup. One of two things will happen: I'll give in and leave to get something to eat, thinking, "I won't be able to concentrate otherwise." When I come back, I'll find that I missed a setup. OR, I'll say, "Too bad, be tough and wait until later to get food." Then I end up zoning out and missing a setup. My sleep cycle is also very "out of alignment" shall we say. Oh well, it could be much worse.

That just made me think of a question for you Thales: As a prop trader, do you have a secretary or something who'll leave the floor to get everyone lunch (or do you trade remote)?