I can’t understand all the exitement in this thread; using trailing stops isn’t exactly a new idea, and one which has proved to be valid to boot.
Of course, like I said in my first post on this thread, it is not feasible for everybody; obviously if you’re scalping for 1-5 pips, you wouldn’t employ it, and if you can’t monitor your trades for time-related reasons, you wouldn’t use it either ( in that case, just setting a ‘standard’ T/S would suffice, I guess.)
Apart from that, one can do just fine with it.
Both opinions presented here have their merits:
Taking your profit at a certain level is a sure, ‘no-messing-around’ way to make money.
Using tight trailing stops may generate a lot of extra pips, but may also net a few pips less than originally planned.
Personally I use both methods, depending on the trade I’ve set up (trailing stops with targets of 50-plus pips, straight take-profits with targets below 40/50 pips) … both work nicely.
akantardjian’s strategy seems sound. You’re risking a few pips in exchange for alot more pips. In otherwords you’re setting up a trade with an extremely attractive R:R ratio with momentum and price action in your favour.
I think, what Mr. Gone was eluding too…and I could be completely wrong… But when you place a TS at your TP price, that you determined In your plan. This shows, you don’t have faith in how you picked your TP. This is not an attack, just an observation)))). I think it is imperative to the discipline of trading, you have defined entry and exit, of course you can change as needed. But it is a road map. For me, I set TP where I believe price will turn. If I set a TS at TP, it would override my analysis. That’s all. Seriously. No attack. Just sharing thoughts and personal experience.
I understand your point, my trailing stop is based on the extreme value of the last two candles, i mean the candle of the day before yesterday and when TS is so tight compared to actual price (in other words havin dojis or no movement ta all) it means one thing: retracement. It is hard to reach the 300 pips. When you are a position/swing trader like me you will understand.
You people are quite bizarre, I must say. Are you trying to make the most money possible, or stick to some self imposed income restricted rule? For crying out loud, I’m not suggesting anything other than risking 5-10 pips for an unlimited potential reward. If your not willing to take that type of a minuscule calculated risk…then go invest in treasury bonds. This is not the place for you. Even if this works 1 out of 10 times…you will probably make money. Also…I do a lot of analsys as well, but as we all know…technicals are only half the battle. So…my strategy is not so arrogant as to believe that it is infallible. I hit my target, then turn a potential I inaccuracy into a positive. What if unexpected news comes out? What if fukushima has another nuclear explosion? What if I expected the GDP to be 3.0…but it was 2.8. If you think that any amount of analysts can help predict the future…then you have had way too much koolaid. 5-10 pips! Good lord…
[I like the post of which I’ve quoted a line here.]
Sure, we all try to set our T/P at what we perceive to be the ‘turning point’ … but we are not always right, right?
I guess everybody who has executed more than ten trades in his life (which we all have, hehe) has experienced price to move 10, 20, or even 50 pips further. My usual reaction to this is ‘[I]Crap, I wished I’d been more confident[/I]’.
While I’m satisfied with the pips I’ve gained at my T/P, I sure won’t say ‘[I]No thanks[/I]’ to a few extra bucks.
So, when market is trending nicely, I nowadays place a T/S 2-3 pips below the price I’d have chosen as my T/P point … and so far, this method has more often gained me an extra 10-50 pips than it has cost me 2-3 pips.
In ranging markets however (which means approx. 70% of the time), I stick to the good old T/P.
Of course, the ‘trailing stop method’ requires one to be present, in order to be able to place the T/S … so it naturally won’t suit every trader.
I think it’s Unit 4 isn’t it weakened from an explosion that is at risk if another earthquake… ok really I think it’s because it’s ‘newbie island’ & clearly there are some on-edge people who should be demoing instead of being live, you know kind of panicking & only hearing themselves instead of the market as well…
Too many irresponsabile people risking too much to earn so little. Because of those people we had the Big Depression, the 2008 crisis and so on. Lehman Brothers broke because of irresponsabile traders, so did Barings Brothers.
Pips are a matter of prospective.
If your trading for penny’s or even dollars, then what’s a pip or 10?
Trading when a pip is 100-1000, may change your prospective.
Bottom line, trade the way that works for you. Every pip to me is important, whether, it be 0.1 or be 1k. Maybe because of my trading style. No worries. Good information all around. I’m 54 been trading awhile, I do not profess to be a pro. But I do this for a living full time, and I support my wife and boy. So I come to learn and I come to share my experiences. No need to get aggravated)))) this is the Internet. The market is aggravating enough)))) good trading dude.
This thread has been beat to glue.
You all can discuss this til the end of all days and it won’t change the rules of success. The rules of success are: If you have a strategy which is [U]properly tested[/U] and shows a proper roi with not too much drawdown, [U]trade it exactly as you tested it[/U]. That can be a scalper with trailers or not or any swing system with fixed targets. The issues arise if you think you can rule out your tested system while be greedy for more pips and let it run (just to see it bounce) or scalp in a swing system where you have fixed targets. Or use a trailer if you tested the system without it.
However, in general if you set your risk:reward ratio too high, you will get nothing but losses. There is a fine relation between risk and reward. If risk is too low, you won’t make much. If you try it, you will get stopped out too often.
Just for the record, the failure of Lehman, and the failure of Baring Bros were apples, and oranges.
Baring Bros did fail because of unauthorized trades. Lehman’s failure was lack of liquidity caused by sub-prime mortgage values dropping in 2007. The losses continued in '08 causing investors to pull their money making the problems even worse.
