Netherlands
Price Action Scientist
Experience: Advanced
Platform: NinjaTrader, IB TWS
Broker: InteractiveBrokers, CQG
Trading: ES
Posts: 1,236 since Oct 2017
Thanks Given: 2,008
Thanks Received: 6,318
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Hi teajay ,
By definition, a trend is a trend as long as it makes higher highs and lows. So only after a new high is established, I think you should trail your stop to a major higher low.
If your eager to take profits too early, your focusing to much on risk maybe. Take a very small position and leave it running. Find a measured move based on the spike, the height of a trading range or else.
When the trend makes a new high, look to see how big the pullback is and trust that your price will come back to the top (forming a double top). If the pullback was bigger than you liked, exit at the close of the previous high.
I think in your case, for the first chart, it's going down all the way, why would you want to exit early. There hasn't been a trend line break, we're making lower lows and lower highs and each new low has follow through bars.
In the second example your provide, after a huge buy climax, it's going sideways, you're probably going to get a little bigger pullback that allows you to get in again at a better price - i would exit when the bars are going to go sideways and hopefully at the closing price of that final bull bar in the spike. You can see how a lot of traders did so in the bar after the bear bar.
So in general, let a trend be a trend. Take some partial profits maybe 2x risk or at obvious resistance levels.
Hope this helps,
Cheers
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