Trade Management & Trailing Stops
We manage our trades with three objectives:
- Lock up a little bit of profit as quick as possible
- Eliminate risk as soon as possible
- Leave a portion of our position in the market looking for a runner (maximize our profits)
3 contracts or more: (scale-out of trade)
- Stop starts at -10 ticks
- My initial targets are +5 (take 1/3 off or ½ off )
- Second target at +10 ticks (take 1/3 or ¼)
- My final target (runner) is managed using additional support and resistance from the market im trading. (not fixed / dynamic)
Move your stop to -5 ticks at the first target (it’s a scratch trade if it fails)
Trailing stops:
- I do not use the Auto-Trail because it takes control out of my hands
o I get stopped out too early when i use the auto trail
- I begin to trail my stop when i see three things:
o Momentum
o Size
o Speed
Bracket Orders = we use these, they automatically add the stops and targets when you enter the trade.
2 contracts? (scale-out, but no runner)
- The only difference between 2 and 3 contracts is the RUNNER.
- So remove the Runner from your 3+ contract strategy, and now you have 2 contracts.
o 10 tick stop
o Targets at +5 and +10
o No runner
- Advanced 2contract strategy:
o 10 tick stop
o First target at +5 OR +10
§ Move stop to entry -5 at +5
§ Move stop to entry -0 at +10
· Use one or the other
o Your 2nd target is your runner
§ Find the levels of support/resistance above/below the trade
§ Watch the your signs of price reversal
· Momentum
· Size
· Speed
§ Trail your stop as needed
§ Be patient for the final target to be filled.
1 contract: (everything changes)
- Risk/Reward must be 1:1 or less
o 10 tick stop, 10 tick target
o Proves that a loss wont KILL YOU
o And you can rebound after taking a loss
- No trade management
o Enter the trade
o Set my stop
o Set my target
o Let it run
o This will FORCE you to learn the correct ways to take each pattern
Contract Rollover:
- Quarterly rollover
o Bonds
o Emini
o Currencies
o Dollar Index
- Eurex
o DAX / FESX
o End of the month
Crude Oil rolls over monthly, and around the 15th of the month we are ‘sharing volume’ between the current month and the next month.
So the LOW VOLUME is what the issue is.
New 4range template:
- Fast4 Template
- Removed the Divergence Indicator
- Changed the settings on the MACD
o Calculate on bar close = true
- Small adjustments to make the processing less demanding
- Fast has momentum
- Fast4 has MACD
- Uses all the GOOD HABITS
- Execute with a simple plan of attack
Tape Reading:
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