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I was wondering if and how many traders out there, actually trade without any pre-determined targets/stops ? Basically using No win:loss ratio, i.e. a target of 4 points and a stop of 2.5 points , on every trade you enter, and you either... 1. hold it to your target or 2. you get stopped out. It may sound crazy, but i've been trying to ween myself away from using such pre-determined targets and stops, and just "Trade " what I see and when it comes. Some stop outs are bigger than others, as some targets ( profits ) are bigger than others. With this way of trading, it in same way, relaxes the fear and stress of having Set in Stone stops/targets. Maybe I'm just crazy lol
Can you help answer these questions from other members on NexusFi?
stops and targets can be set based on market structure - so you have a true point of failure and a realistic area price will likely visit for your timeframe. Trading with inelastic stop and target distances seems too mechanical, forcing an idea on a market that may not support it based on how it's unfolding.
Depending on the market: ranging/trending, high volume vs low, isn't normal to change target/stop? Of course changing contracts traded to balance risk.
Thank for the replies. I guess this is why I am trying to narrow down my searches for an Indicator that will help " Tell me " , whether the current move in a trade is strong , and can push through resistance / support levels . When price gets to say a Resistance level, that is clear to anyone watching that particular market ( ES ) for example, instead of tightening your stop or closing the trade out all together, what do other fellow traders on BM's , use to help them determine to stay in the trade? I have heard of some traders using Volume, or bid/ask tape reading. I have also been reading up on Heiken Ashi candles, as a way to base a Move/Trends strength. Since the Heiken Ashi is calculated and based differently than a regular candle, I think using Heiken Ashi candles could be a benifit or conformation I should say, on whether the trade has the " Legs " to push through levels that would other wise, without the conformation from the HA candles, Pullback ( enough to take any tight trailing stops out ) or do an immediate reverse Thank you for everyones Input, much appreciated - Michael
whether to stay, bail, or remove risk is always a difficult call. We're basically getting into trade management at this point. I don't think there's a 'golden' indicator you can put up on a chart that lets you know how to do this, unfortunately. For me, it comes down to feel and intuition (mainly on the DOM, but market profile and tick charts are also helpful), a product of experience.
One thing you can watch for is horizontal vs. vertical development, and at what price areas these occur. Then assimilate that into the other things you watch to have a more educated idea of what to do.
No I think you are not crazy. I trade always without pre-determined targets/stops and donīt care about any win:loss ratios. The concept of fixed stops and targets, is IMHO counterproductive because itīs limiting the potential of a trade. Itīs better to let Mr. market decide on the outcome by setting an stop based on market structure.
As an absolute minimum you need a stop to define your risk...this is critical though to avoid using a Target why not use a Trailing Stop so you get the best of both worlds - constant risk but open ended upside if the market blasts off in your direction? You just need to set the initial trail amount or consider adjusting the Trail amount as you move into profit, this is usually based of your current profit amount in terms of units of risk or $$$ - your call.
There are many reasons for and against using Trailing Stops but this has to be one of the best!!
Godzilla, you make a good point about using a trailing stop. Even if I'm not entering my trades with specified stops , a trail of 10 - 12 ticks seems reasonable for me. I trade larger timeframes, so the pullbacks can be some what substantial , so I wouldn't want to trail it to close, and run the risk of being taking out on a pullback, only to see the trade go to a 6 - 8 point move in my favor.
hey there...stop management is what you feel is good for you. Do what you think is right per your risk appetite. Not really sure if there is right or wrong way. If there is a certain way which is working for you...explore more.
For me Stops are good for ensuring there is no run away loss.....1) if emotions are not handled 2) no discipline 3) and ofcourse trading size as things can go haywire in a fast market spike 4) no one trade is so great that i lose more than what i think i should since the very next trade can be real profitable. It's all about the probability /patience & me playing myself hence i put a stop in
just mho...for what it's worth. Goodluck with yr trades bud.
