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My one point dilemma
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Created: by mcteague Attachments:0

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My one point dilemma

  #11 (permalink)
Elite Member
New York NY USA
 
Futures Experience: Beginner
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It had not occurred to me when I posted this that this is largely a beginner, or at least small portfolio issue, as more money provides more options.

I want to respond to some the points that have been made.
Re testing: I agree with testing ones strategies. But I think it is much more easily said than done. After experimenting and learning for about a year, I have simplified my strategy significantly. I use one trend indicator ( in my case TSI) and one oscillating indicator (in my case cci) When certain lines or levels cross ( or diverge, converge, etc) I pay attention and hopefully take appropriate action. I also keep Keltner channels up. But mostly I trade my two primary indicators.

The trouble with testing is that what I just said is a lie. Yes I use those indicators. But there are actually lots of little things I look at before pulling the trigger, The bars or candles themselves, support and resistance levels, the actual angles of those line crosses in the indicator. And a few other things I might glance at for confirmation or a general idea of the market. It is very difficult for me to put exactly what I am doing into a testable strategy. It just never seems to work for me.

I am going continue in another post.
Thanks for the replies and ideas though

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  #12 (permalink)
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I just want to mention what is bad about the the 1 point strategy. It is usually necessary to have a stop that is wider than one point. I usually have a default 2 point stop that I adjust a little according to market conditions. The affect of this is that the first trade of the day becomes vitally important.

If my first trade is a winner then the one point strategy works fine. Even if, as occurred on Monday, I reenter immediately after hitting my plus one target stop. I just find the whole day more pleasant. If on the other hand I am stopped out for a two point loss. Well it is just going to be a struggle. and I may have to ignore the whole 1 point idea to get back to even. Generally we would prefer that our targets are wider than our stops. 2 to 1 at least. You can not do that with a 1 point target because you will be stop by normal bar fluctuation. So you better be right most of the time.

It might not be clear, but there are two ways to get the one point. One just have a one point target. The other is to put out a stop of say +1 when price hits +1.5. That is what I have been doing this week because although I am happy to take one point, I don't want to completely give up the chance of a higher move.

So this one point system is not perfect. But it does have some value and can be used often.

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  #13 (permalink)
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mcteague View Post
It might not be clear, but there are two ways to get the one point. One just have a one point target. The other is to put out a stop of say +1 when price hits +1.5. That is what I have been doing this week because although I am happy to take one point, I don't want to completely give up the chance of a higher move.

Can you give an example?

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  #14 (permalink)
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ghl123 View Post
Can you give an example?

Well this is probably a little off topic. But this goes to an issue that I argue about with someone I know who is a professional equities trader.
He says: "Never make a trade that you have not planned out. Know your entry, exit, and risk before hand. Your stops and targets should be defined by the chart and your indicators and not some predetermined strategy."

From a professional perspective he is of course correct. But the truth is that I am always able to answer the questions. Especially when it comes to targets. Sometimes I can judge, but a lot of the time I know its going to move, but thats all. Maybe as I learn more I will do it the "correct" way. But I am where I am and need to define my targets and risks based on that.

To answer your question: If you have a break/even function in your trading platform this is easy to do. Set the trade for breakeven plus 4 ticks with a trigger of plus 6 ticks. In the ES that would lock in 1 point profit and leave 2 ticks for price to move inside of in case it continues higher.

So when at 11:34 I entered the ES long @1689 my break even stop would have been would have been set to 1690 when price got to 1690.50. If it fell back I would have my 1 point. In this case it continued up and I exited the position at 12:25 @ 1692.75 for 3.75 points. In this way I gave myself a chance for the bigger gain.

Just noticed you use ninja. This is part of ATM strategies. Look at the documentation


Last edited by mcteague; August 8th, 2013 at 01:40 PM. Reason: addition
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  #15 (permalink)
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mcteague View Post
To answer your question: If you have a break/even function in your trading platform this is easy to do. Set the trade for breakeven plus 4 ticks with a trigger of plus 6 ticks. In the ES that would lock in 1 point profit and leave 2 ticks for price to move inside of in case it continues higher.

So when at 11:34 I entered the ES long @1689 my break even stop would have been would have been set to 1690 when price got to 1690.50. If it fell back I would have my 1 point. In this case it continued up and I exited the position at 12:25 @ 1692.75 for 3.75 points. In this way I gave myself a chance for the bigger gain.

Just noticed you use ninja. This is part of ATM strategies. Look at the documentation

Yes I use NT, however your strategy not quite right (or maybe I got it wrong). In the example you gave, you entered long @1689, what happen if the price got to @1690.25 and then retracted to your initial stop? You will end up with a loosing trade.

More importantly what is your initial stop? 8 ticks?

Are you using one contract (1 target), or two contract (two targets and you move the stop to break even plus for when the first contract hit it's target)?

Can you do a print screen of your ATM strategy and your Stop strategy windows?

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  #16 (permalink)
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My Current default:

1 Contract
initial stop is 8 ticks
initial target is 20 ticks

Auto Breakeven

Trigger 6 Plus 4
That means when price is 6 ticks plus I go to break even plus 4 or 1 point.

Auto Trail

At 10 ticks up, I trail by 5 ticks with a frequency of 2
At 16 ticks up, I trail by 4 ticks with a frequency of 3

Please note that this is a work in progress. Also the auto trail stuff is mostly there for safety. I mean I might actually have to go to the bathroom or not be in front of the screen for some reason. And of course I might have an overnight position. Although I try not to. The point is that when I am watching I might move these around a bit.


Yes you are correct.

If in the trade I did today price had only gotten to 1690.25 and then fell back to my stop I would have had a losing trade. If I wanted to guarantee 1 point I would close at 1690.25. Which would be a point plus a tick for commissions.

The problem is I don't want to be stopped out if price has a chance to move higher. You have to leave a little wiggle room

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