Vil wrote: ↑Mon May 25, 2020 8:41 am
pmward wrote: ↑Thu May 21, 2020 11:00 am
I'm trying to expand my horizons a bit with a new technique
Having said that ... Master Pm
, I was having in my (mid-term) TODO to ask you something.. the right time just came
So, it might sound you not quite a wise, but I am relying a lot on trailing stop loss orders those days. Rationale behind is the following - once I jump on the train (that's home brewed combination of HA candles, stochastics and MFI and definitely not the grail), I rely a lot on trailing stop losses to exit (as I said - especially those days).. Again, it might sound not really wise to do it all the time, but those days as I am generally lacking the time to contemplate a lot on support/resistance levels (Fibs I am not a fan of), etc. I just let it run ... Normally, for my day trading adventures I start with slightly generous 2 ATR.. then, if the trade gains traction I am decreasing it.. What's your thought on the slack of the trail ? As usual - thanks.
I'm not a fan of arbitrary percent based trailing stops. I always trail a stop but I always use support levels, moving averages, average true range, etc to help me find the proper level. The timeframe of the trade also helps determine this. For instance, if I'm looking for a big multi-month to multi-year trade I will place my stops based on the weekly chart. If I'm looking for a couple week to couple month trade, I'll place my stops based on the daily chart. If I'm looking for minutes, hours, or days I'll go to different intra-day charts (1 hour, 15 min, and 10 min are my favs). Support and resistance is the most effective technical indicator out there. Large institutions, hedge funds, prop desks, etc make up 90% of the volume out there and they all trade using support and resistance levels. They work because of this. It's not magic, it's just that most of the volume out there uses these levels to trade (remember each timeframe chart has different support/resistance levels too). These support levels include major pivots, fib retracement levels, popular moving average lines, gaps, break up/down candles, trend lines, patterns, etc. So my best advice to you would be to really learn how to read a candle chart first. This is the most important tool I've found. All you really need to trade effectively is a candle chart and the popular moving averages (20, 50, 200 period SMA's). If you buy at support and sell at resistance, while always keeping a stop below a strong resistance level, you will win way more trades than you lose and minimize the damage in your losses. I find the other indicators to be more confirmation than actual trading indicators. I never place a trade based on an indicator, but I do glance at RSI, spread charts, and PPO/Macd for general confirmation/divergence signals as well as for quickly narrowing down a large pool of potential trades down to the strongest or weakest depending if I'm looking long or short respectively.
My favorite technique in the past was buying a breakout of resistance, and placing a stop below. Lately I'm trying to buy support, and once again placing a stop below. In this new strategy it really warrants finding a trade where there are multiple levels of support on multiple timeframes in the same general area. The more reasons for support, the higher the odds it bounces.