Leading Limit / Trailing Stop Advice Needed

LauraRomans

Member
68 2
Please add your opinion about a "leading limit" as a strategy.

Trailing stops react to market movement. What if limits also react to market movement?

Is it reasonable to increase a limit if the market is trending in its direction and conversely, decrease the limit if the market is trending against its direction?

Does anyone use "leading limits"?
 

Splitlink

Legendary member
10,850 1,234
Please add your opinion about a "leading limit" as a strategy.

Trailing stops react to market movement. What if limits also react to market movement?

Is it reasonable to increase a limit if the market is trending in its direction and conversely, decrease the limit if the market is trending against its direction?

Does anyone use "leading limits"?

Advice rom me is suspect. :) However, an idea, perhaps.

How about trying a channel trend, taking a profit over the top and buying in, again, on the bottom line? It depends, of course on the whether it is worth the trouble, if it is for a few points and you might get a lower high, signalling a down move. Frankly, I've tried this, without too much success, unless one is in at the start of a new trend. With an old trend it is better to take profit on a leading limit, feel fortunate and wait and see what happens next.
 

LauraRomans

Member
68 2
Advice rom me is suspect. :) However, an idea, perhaps.

How about trying a channel trend, taking a profit over the top and buying in, again, on the bottom line? It depends, of course on the whether it is worth the trouble, if it is for a few points and you might get a lower high, signalling a down move. Frankly, I've tried this, without too much success, unless one is in at the start of a new trend. With an old trend it is better to take profit on a leading limit, feel fortunate and wait and see what happens next.

Thanks, this is a good example.
 

LauraRomans

Member
68 2
Can you give an example ?

For example, if a long trade has a timed exit (say it exits after 20 minutes), rather than exit at market in 20 minutes, the program could have a limit, 20 minutes after entry that exits on the next highest high.

Sometime the changing limits results in a loss, but more often than not, the changing limits results in additional profit.

Does this mean the changing limit is a good system? Or, does this mean the 20 minute exit was not the best exit?
 

LauraRomans

Member
68 2
Traded live for 3 weeks and going well. Although, there are "no fills" quite often for both entry and exit. Any suggestions?
 

LauraRomans

Member
68 2
2 me a limit is what it says it is, a limit to your profits.

Your point is well taken. But it is common to not describe a stop as a stop. Stops are often described as moving based on most resent market conditions. This begs a questions.

Should a limit or stop ever move?
 

MobiusGrey

Junior member
16 3
Why would you limit your profit. the old adage of "no one ever went broke from taking a profit" doesn't hold water if your losses exceed your wins. "let your winners run and cut your losses short".

Why would you use a TP level based on time and not on the market itself? Base it on S/R, or even on round numbers, don't base it on time, time has no influence on the market what so ever.
 

LauraRomans

Member
68 2
Why would you limit your profit. the old adage of "no one ever went broke from taking a profit" doesn't hold water if your losses exceed your wins. "let your winners run and cut your losses short".

Why would you use a TP level based on time and not on the market itself? Base it on S/R, or even on round numbers, don't base it on time, time has no influence on the market what so ever.

I take profit early because I'd rather have something than chance nothing or losses.

Backtesting (17 years on 1 min bars) tells me the counta move is at least 3 minutes long 80% of the time. I'm ok being right 80% of the time. So if i don't take a profit or a loss i simply exit at 3 minutes. It seems to work - but you are right, I leave a lot on the table!

What is a TP and a S/R?
 
 
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