Stops and Targets

[playafh69 10]

Ive been trading for a while( and profitable), and I keep running to the same two problems. One is stops. All my trades start as scalps, but i hold 1 or 2 cars depending on my size to swing with to try to capture larger gains. My average time in the markets are about 10 min(including swings).

I want to know peoples opinions about stops. One is placing them around swing points (like 15 ticks above or below last high/low, not one tick) or just using volatility based stops, like 3xATR on a 3 min chart(which is what i currently use).

Second is targets. I am a discretionary trader, and I try to read the markets when i wanna decide targets. If its a trending market, I usually go in heavier size with larger targets(methods of trying to decide trend strength is price action, expanding volume, AD line and trend.....) I also wanna get opinions on this as well, do you trail stops using ATR method like above, or do you just get out no matter what when it hits your target????

Is it better to always trail or have defined stops. Remember, my stops are always larger than my initial profit targets, thats why im asking. I currently trail but get out when tape starts to weaken. This method works great in choppy markets since i can literally get out near swing points, but I miss out on big moves when its trending(old habits and mainly because i hate getting burned when i give back profits). Example of stops and targets is risk $120, first target is $60, second target is around $200. But again, i do get out sometimes even at first target when i notice tape starting to weaken(great advantage which really helps me become profitable)... Im not going to get into what i mean by tape reading.

[firewalker 10]

Ive been trading for a while( and profitable), and I keep running to the same two problems. One is stops. All my trades start as scalps, but i hold 1 or 2 cars depending on my size to swing with to try to capture larger gains. My average time in the markets are about 10 min(including swings).

I want to know peoples opinions about stops. One is placing them around swing points (like 15 ticks above or below last high/low, not one tick) or just using volatility based stops, like 3xATR on a 3 min chart(which is what i currently use).

Second is targets. I am a discretionary trader, and I try to read the markets when i wanna decide targets. If its a trending market, I usually go in heavier size with larger targets(methods of trying to decide trend strength is price action, expanding volume, AD line and trend.....) I also wanna get opinions on this as well, do you trail stops using ATR method like above, or do you just get out no matter what when it hits your target????

Is it better to always trail or have defined stops. Remember, my stops are always larger than my initial profit targets, thats why im asking. I currently trail but get out when tape starts to weaken. This method works great in choppy markets since i can literally get out near swing points, but I miss out on big moves when its trending(old habits and mainly because i hate getting burned when i give back profits). Example of stops and targets is risk $120, first target is $60, second target is around $200. But again, i do get out sometimes even at first target when i notice tape starting to weaken(great advantage which really helps me become profitable)... Im not going to get into what i mean by tape reading.

 

Stops and targets are different for everybody. It's probably difficult for anybody to tell you what you should do, let alone give specifics about stops & targets since you haven't told us much about your style other that you're scalping.

 

But this is my 2c:

 

stops should be placed at a technical level, and not be a result of "ah this is how much money I'm willing to risk on this trade". If the trade carries too much risk, lower your size or skip the entry.

 

If you're scalping then you'll miss out on big moves. If you want to catch big trending moves, you'll have to stay in longer. That might not be suited to your style of trading...

 

You might also want to use the search feature, since there are plenty of threads dealing with the subject you raise and you might find some more answers there.

[playafh69 10]

I think i gave enough details about how i trade, im not going to give away my method. I said that all my trades start out as a scalp, meaning that i wanna get rid of half as soon as it goes in my favor to lesson risk, but i hold some for the bigger moves.

 

Im guessing your saying that you prefer to use the last swing high or low instead of volatility based stops.

Any others????

[firewalker 10]

I think i gave enough details about how i trade, im not going to give away my method. I said that all my trades start out as a scalp, meaning that i wanna get rid of half as soon as it goes in my favor to lesson risk, but i hold some for the bigger moves.

 

Im guessing your saying that you prefer to use the last swing high or low instead of volatility based stops.

Any others????

 

Instead of exiting as soon as possible, you could protect your risk by moving your stop closer or to breakeven. Just a thought.

 

Sometimes there are no swingpoints on the bar interval you've chosen, and price can move in a straight line reversing sharply too. As always, context is what matters and I can't say there's a one-fit-all solution. You'll have to find a compromise between risk and potential reward. If you want to catch the big swing, you'll have to sit through some retracements.

 

My stops aren't affected that much by volatility.

[wasp 10]

EVERYTHING in any market happens for a reason.

 

Don't ask what others do, learn the players of your market of choice and through trial and error, find what is the highest returning combination of stops and trails which produce the highest return with minimal risk.

 

Once you understand how the main market movers move your market, determining stops and when to exit will become obvious, simple and easy to read.

 

Knowledge is king.

[brownsfan019 17]

Stops: I place at some sort of technical level - S/R level mainly.

 

Profit Targets: No matter what you do, you'll always be wrong. Once you accept that, you can be at peace w/ it.

 

What I mean is that you will NEVER, EVER, EVER have the perfect exit all the time. Some trades are much better to pick off a previous level and be happy; while others will reward you for hanging on all day. In my years of trading, profit targets have always been my arch nemesis till I realized that profits will never be perfect. Never. Once I realized AND accepted that, I worked w/ the tools I had in front of me.

 

From there it's a matter of tracking your statistics and finding what is the most profitable and/or least risky model you have at your disposal. If you are not tracking your trading, that's problem #1. Track your possible exit points and if you accumulate enough data, it will be clear as day how you should be exiting your trades. If you are not serious enough to do that or just shooting from the hip, good luck b/c you will need it.