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A Noobie Wants to Know


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A Noobie Wants to Know

  #1 (permalink)
 switchgear666 
Stouffville Ontario Canada
 
Experience: Beginner
Platform: ThinkorSwim, NinjaTrader
Broker: Global futures/Ironbeam
Trading: ES
Posts: 11 since Aug 2015
Thanks Given: 16
Thanks Received: 2

So.... I figured because these are such "beginner" type questions...I would post this thread in "Beginners"

I hope BM agrees lol!

I would like to know what is meant by a "trailing stop" and what or where i can get a really good indicator for "price action" other than the obvious price marker....

I trade sim for now (since i got my teeth kicked in LIVE) on the Emini S&P....or i guess just the ES.

Any and all comments and advice is appreciated!


Thanks

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  #3 (permalink)
 
SatchFan's Avatar
 SatchFan 
Jefferson City, Missouri
 
Experience: Intermediate
Platform: NinjaTrader
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Search on Google or YouTube for Trailing Stop. Plenty of good info out there.

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  #4 (permalink)
 switchgear666 
Stouffville Ontario Canada
 
Experience: Beginner
Platform: ThinkorSwim, NinjaTrader
Broker: Global futures/Ironbeam
Trading: ES
Posts: 11 since Aug 2015
Thanks Given: 16
Thanks Received: 2

Yes for sure...looked there already maybe I will need to look again.

Thanks

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  #5 (permalink)
 
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 Big Mike 
Manta, Ecuador
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Swing Trader
 
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switchgear666 View Post
So.... I figured because these are such "beginner" type questions...I would post this thread in "Beginners"

I hope BM agrees lol!

I would like to know what is meant by a "trailing stop" and what or where i can get a really good indicator for "price action" other than the obvious price marker....

I trade sim for now (since i got my teeth kicked in LIVE) on the Emini S&P....or i guess just the ES.

Any and all comments and advice is appreciated!


Thanks

Trailing stop simply means your stop is moved as price or an indicator moves. For example, if you used a moving average you could set your trailing stop to be the moving average. Or another example would be for every 20 ticks price moves up, you move your trailing stop up 10 ticks.

In virtually every case, a trailing stop is a rookie mistake and will cost you money. Better to learn where to exit the market than to just use a random method like a trailing stop.

Mike

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  #6 (permalink)
 
SatchFan's Avatar
 SatchFan 
Jefferson City, Missouri
 
Experience: Intermediate
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switchgear666 View Post
Yes for sure...looked there already maybe I will need to look again.

Thanks

This one is a decent video.


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  #7 (permalink)
 
tturner86's Avatar
 tturner86 
Portland, Oregon
 
Experience: Intermediate
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Big Mike View Post
Trailing stop simply means your stop is moved as price or an indicator moves. For example, if you used a moving average you could set your trailing stop to be the moving average. Or another example would be for every 20 ticks price moves up, you move your trailing stop up 10 ticks.

In virtually every case, a trailing stop is a rookie mistake and will cost you money. Better to learn where to exit the market than to just use a random method like a trailing stop.

Mike

Yeah they are almost like shooting yourself in the foot. I have never had a trailing stop work in my favor. Even me manually trying to trail the stop.

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  #8 (permalink)
 switchgear666 
Stouffville Ontario Canada
 
Experience: Beginner
Platform: ThinkorSwim, NinjaTrader
Broker: Global futures/Ironbeam
Trading: ES
Posts: 11 since Aug 2015
Thanks Given: 16
Thanks Received: 2

Thanks Mike and everyone as well....solid answers!

JD

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  #9 (permalink)
 
FABRICATORX's Avatar
 FABRICATORX 
San Tan Valley, AZ/USA
 
Experience: Advanced
Platform: NT7
Broker: IB, Tallinex, & 10 others.
Trading: Futures
Posts: 195 since Jun 2013
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Think of your trade as a vehicle, say a car.

Say you're driving your car up a hill. Behind your car is a long rope with a huge log attached to it. The log is trailing you.

You're driving up the hill, and suddenly, you hit ice, and your car slides backwards and hits the log. The log holds you in place.

You got stopped out.

The problem is, "natural" support and resistance doesn't follow your trade around. If your trade moves up, the support and resistance lines stay in the same place.

With that in mind, a trailing stop limits you because you might get stopped out prematurely. What if the trade slid down, only to move back in your direction?

The correct approach would be to set your stop underneath the "natural" support line. If that location is 10 ticks farther than your trailing stop, so be it. Just decrease your position sizing to accommodate the potential movement, so your risk stays around 2%.

Someone please correct me if I am off base here.

-Jimmy
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  #10 (permalink)
 switchgear666 
Stouffville Ontario Canada
 
Experience: Beginner
Platform: ThinkorSwim, NinjaTrader
Broker: Global futures/Ironbeam
Trading: ES
Posts: 11 since Aug 2015
Thanks Given: 16
Thanks Received: 2


Wow fabricatorx!!!

That was an amazing analogy!!

Thank you so much....very insightful!

JD

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Last Updated on October 14, 2015


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