What's your stop loss?

I've been settling into using a 6-tick stop loss the the ES (S&P E-minis) and starting to get comfortable with this. I take partial profits at a 6-tick gain and let the 2nd one stay as a runner. Would like to know what risk/reward parameters others use for ES, NQ and TF futures.

JeffreyLin said:

I've been settling into using a 6-tick stop loss the the ES (S&P E-minis) and starting to get comfortable with this. I take partial profits at a 6-tick gain and let the 2nd one stay as a runner. Would like to know what risk/reward parameters others use for ES, NQ and TF futures.

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I think that is small, you must get stopped out a lot. Whats your basis for entry ?

LoveToTrade said:

I think that is small, you must get stopped out a lot. Whats your basis for entry ?

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Small!

That strikes me as being pretty wide (unless you're swing trading). I trade the YM and I'm using a 3 tick stop which I admit is pretty tight. Horses for courses I suppose!
Tim.

4pts is v.common for me swing trading

Hi Timsk

Sorry to be pedantic, however in so far as the YM is concerned, since its smallest increment is 1 point, presumably your 3 tick stop is actually a 3 point stop.

I trade the YM 3 point stop, FF with a 3 point (6 tick) stop & the ES with a 1 point (4 tick) stop.

DMA, using only S/R price and volume. Typical R/R 5 to 1.

Peace

peace said:

Sorry to be pedantic, however in so far as the YM is concerned, since its smallest increment of movement is 1 point, presumably your 3 tick stop is actually a 3 point stop.

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Hi peace,
Bulls eye!
Tim.

I've been using 4ticks on the dax, probably should use more but like to keep the risk low....2 contracts first target 4 tick move stop to break even and 2nd target when it runs out of steam.

Unless you're all talking about your max risk per trade, I don't know how or why anyone would just have a single stoploss that they deem universal for every trade. IMO, a stoploss should vary from trade to trade depending on where price should be to make you believe the play is no longer valid and therefore you no longer have a logical reason to stay in the trade.

JeffreyLin said:

I've been settling into using a 6-tick stop loss the the ES (S&P E-minis) and starting to get comfortable with this. I take partial profits at a 6-tick gain and let the 2nd one stay as a runner. Would like to know what risk/reward parameters others use for ES, NQ and TF futures.

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by 6 ticks, I take it you mean 1 and a half points ?
so that's $75 per trade at risk ?
the oft-quoted "2%" maximum risk would mean your account should therefore be just shy of $4,000 ?
if your account is bigger, or smaller, maybe you need to reconsider, readjust ?

but whatever you decide upon, don't become fixated - 1 and a half points is okay in current market conditions with the ATR such a small, tight range,
but when volatility expands back to normal levels, and ATR rises, you'll need to start looking at anything up from 2,3,4,5,6, full points if you want to avoid getting stopped out all the time.

track down N_Rothschild's links to videos of pit audio action to see the market in full tilt with 10 point spreads !!

http://www.youtube.com/watch?v=uodKTWWmIs0&feature=player_embedded

(with thanks to Genics N-R for the original posting of these)

this should persuade you that 6 ticks won't always be the right answer !!

http://www.youtube.com/watch?v=zYFPECGfBS4&feature=player_embedded#

I remember watching a video before by a guy who goes by the name traderb52 - he talked about hard stops and mental stops - anyone here using both or just the hard stop? I agree with earlier comments that stops cant be used in a 'one size fits all' and must be dynamic in regards to the current volatility and range.

GotItForCheap said:

I remember watching a video before by a guy who goes by the name traderb52 - he talked about hard stops and mental stops - anyone here using both or just the hard stop? I agree with earlier comments that stops cant be used in a 'one size fits all' and must be dynamic in regards to the current volatility and range.

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Agreed.

On eurodollar FX and any other instrument i trade, entry choice (long or short) are determined by the position of price versus point of control in market profile.
Stop is determined bij high/low volume areas in market profile. Entry is only done provided the MP determined stop is in accordance with position sizing plan.
e.g. if a stop of 8 pips allows 2 positions, then a trade having to use MP determined stop of 16 may take only 1 position, and one that allows for 4 pips stop may put on 4 positions.

TR

pmccandless said:

Unless you're all talking about your max risk per trade, I don't know how or why anyone would just have a single stoploss that they deem universal for every trade. IMO, a stoploss should vary from trade to trade depending on where price should be to make you believe the play is no longer valid and therefore you no longer have a logical reason to stay in the trade.

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Hi pmc,
As a general rule of thumb, I concur with this view and especially with the point that r_e has made about volatility. On the face of it, this might seem contradictory given my earlier remarks!
:cheesy:
Allow my to explain . . .
Currently, I trade using 1 x 3 box reversal P&F chart (YM e-mini Dow). I only enter long when a new column of (green) Xs has formed and I use a limit order to enter two ticks above the low of the previous column of (red) Os. My stop is set three ticks away from my entry, i.e. at the point the low of the previous column of red Os is breached. Because of the nature and construction of P&F charts, I'm able to maintain a constant stop of 3 ticks in the current market. If the the volatility picks up - as in r_e's 2008 'meltdown' videos, then I'll increase the number of ticks upwards to whatever is required to absorb the volatility. So, my stops will always be in multiples of three, 6, 9 and 12 etc. although I hope that volatility doesn't increase to such an extent that it'll be necessary to adjust my stops that far!
Hope that makes some sort of sense?
Tim.

timsk said:

Hi pmc,
As a general rule of thumb, I concur with this view and especially with the point that r_e has made about volatility. On the face of it, this might seem contradictory given my earlier remarks!
:cheesy:
Allow my to explain . . .
Currently, I trade using 1 x 3 box reversal P&F chart (YM e-mini Dow). I only enter long when a new column of (green) Xs has formed and I use a limit order to enter two ticks above the low of the previous column of (red) Os. My stop is set three ticks away from my entry, i.e. at the point the low of the previous column of red Os is breached. Because of the nature and construction of P&F charts, I'm able to maintain a constant stop of 3 ticks in the current market. If the the volatility picks up - as in r_e's 2008 'meltdown' videos, then I'll increase the number of ticks upwards to whatever is required to absorb the volatility. So, my stops will always be in multiples of three, 6, 9 and 12 etc. although I hope that volatility doesn't increase to such an extent that it'll be necessary to adjust my stops that far!
Hope that makes some sort of sense?
Tim.

Click to expand...

A 3pt stop on YM? Doesn't that get hit all the time just with 'noise'?

Jack Hughes said:

A 3pt stop on YM? Doesn't that get hit all the time just with 'noise'?

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Hi Jack,
Yes, that's the danger.
However, I trade reversals and, so long as I trade well (sadly - often I don't!) - it's not as big a problem as you might imagine. My strategy is ultra defensive - in other words - I have three priorities with each trade:
1. If I lose, to only lose the absolute minimum necessary.
2. Next objective is to get to break even. I take off half the trade at +4 ticks, so the balance is a 'free' trade that at worst will close out at b/e.
3. To make a profit on the remaining half.



The chart above shows the YM from last Friday 16.04.10. Following the double bottom (DB), there was a 10.00am reversal. I wasn't trading this session, so this is cherry picked to illustrate a point, but I could have entered at any time after the DB to take a piece of the ride from 11,055 up to 11,085 and I'd only have been stopped out once on the column of red Os circled bloo. Otherwise, I could have entered at anytime on that move up without my stop being hit. In the event I'm stopped out, the loss is so small that I can get straight back in again on the next column of rising green Xs (for a long). The secret is timing and to only take the best entries and trade in the direction of the dominant trend.
Tim.

answering the question :

ES : stop is 1.5 points (6Ticks) (i hate this market at the moment.. Mon/Tues was getting back to normal range but after today I hope it dies or I will watching it!! )

6B : 6 ticks/points/pips whatever u call it.

6E : 6 ticks/points/pips.

yep i like the number 6

Small sclap trader just trying to earn a buck!!

I don't even bother with ES. It's so slow that I can't stand it.

I trade Cl, 6E, and either TF or 6B. I trade between 1 and 3 contracts on each, depending on the movement. Normally 3 contracts though. My stops are 5, 7, 12 ticks. Usually if the trade is in my favour I don't have to group the stops together or move them. I have my system set to move to break even automatically after 3 ticks, where my first target is, and then go from there. If the market is pretty volatile I would move my stop loss off break even just so then it doesn't take me out with only 3 ticks winning. Otherwise I just let it run to take target 2 at 5 ticks and 3 at 12 ticks.

Sometimes I have to adjust my stop loss very wide due to getting in early on a trade. It pans out normally.

I'm just on a demo right now, still getting used to the system, and still learning with my teacher.

Ninja_Trader

how do you set 3 different stops ? given 1 entry even if it is 3 cars ??

The only way I can think off is that you have a naked entry ...then place, sell stop's or buy stop's at different price levels manually ?

If you trade the 6E ...given your targets and stops ...there is no way you can place them in manualy all at the same time and then adjust them aswell ?

What broker/platform do you use ..

BJ, any decent DOM, like infinity futures, can do this