Riding a trend?

C

cd173

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Afternoon everyone

I have a reoccuring problem trading the DAX and the Mini Dow.
How exactly to you ride a trend with a trailing stop?
For instance today at around 15.20 I correctly caught the bounce in the upward trend of the mini dow, but I closed way too early with a 12 point target.
I use a 5min chart with a 3min for confirmation.

Anyone have any ideas as to how to use an effect trail stop which allows enough room to stay in a trend?

Thanks in advance
Chris
 
Oh dear!

twalker

How so?
Are you refering to my chart timeframes?? :cheesy:

C
 
A guy here had the same problem and he started using some sort of Keltner Channel thing with lines all over the place to keep him in the trend. No idea if it worked yet as shortly after he installed it he went on holiday and hasn't come back yet.
 
So is it perhaps better just to have a target in mind and stick to it?
Does anyone really know how long a trend could last?

and I thought greed was good? :cool:

Cheers
 
and the timeframe :)
would have thought with a 5min chart 12 points is pretty good. Maybe you should rather work on re-entry strategy on continuation rather than changing exit as a lot of the moves in that timeframe are going to be smaller.
Maybe look at one more longer timeframe chart like 15min and transfer position to that chart once in money by certain amount and apply similar rules to that as you do to 5min/3min.
 
twalker

"would have thought with a 5min chart 12 points is pretty good."

Really? on a 5min chart I would expect more, but these futures are a funny business.

May I ask what your market of choice is?

Point taken with the 15min chart. Use to use a 1min, but that's a bit fast for me!
On a 5min I expect a trade to last around 30mins maybe or a bit less with around 4 trades in the morning and 4 in the afternoon.

But that's if things work out......think I'll stick with targets....

Cheers
 
I tend to look at 30min and 60min charts but trade nearly exclusively spreads on interest rates. Shortest chart I ever go to is 10min but that is only to resolve system signals that work off 60 mins.
I guess I must be long term compared to you but I just trade for a tick or two so 12 points would be so monstrous to me that I would probably blow a gasket.
 
cd173 said:
Anyone have any ideas as to how to use an effect trail stop which allows enough room to stay in a trend?
Click to expand...
What's wrong with a training stop of 'max risk' size or half-target size - whicever is the smaller?
 
twalker

Thanks for the feedback.
I take it you hold your trades for a couple of hours at a time. I've tried this but I suffer from impatience!!!

The only long term stuff I do is swing trading US stocks which I find very unstressful compared to futures!

Cheers
C
 
The Bramble

Not sure I follow the 'max risk' thing, but I take it that if the target is 10 points that keep a trial stop of 5 behind the peak price?

I was also looking at a stop at the low of the previous 5 min bar, but I feel that would only work in a strong uptrend?

Due to the volatility of futures, targets may make a sensible strategy (so I've been told)

Cheers
C
 
The thing is, had your 12pt target been hit and then the DJ gone against you, you'd be feeling rather chuffed now.

The fact that it went on up another 70pts has made you feel your exit was incorrect. If you were following a system, you came out perfectly!

A trailing stop will work well only if you've got the relative volatility (which is an intrument-by-instrument, day-by-day [possibly hour-by-hour]) thing right.

By 'max risk' I mean if you are prepared to risk X% of your trading capital per trade, that defines itself the basic stoploss. The trailing stop can normally be brought into play at breakeven and depending on trading style can be anything from 'max risk' to a fraction thereof.

Any help?
 
cd173,
Some things that I have learned from the generous chaps/chappesses on T2W over the last year all of which are in the archive somewhere if I could find them :LOL:
In a trend ES rarely moves more than 10 pts without a decent pullback,
Dow pullbacks normally 20 pts ish before continuing but in a strong trend can increase to 30ish,
Trade 2 ( or more contracts ). Take profit on 1 contract at your target, move stop on 2nd to breakeven asap, profit now guaranteed so you can trail a stop with the 2nd until the mkt takes you out. 20 pt trailing stop would have caught the whole up move on the Dow today
HTH, good luck,
hampy
 
Until the bend at the end.
Click to expand...

Should of seen that one coming! :cheesy:

Ah..but how do you know it's a bend and not quick correction?

Didn't see that one coming did you! ;)
 
cd173 said:
Anyone have any ideas as to how to use an effect trail stop which allows enough room to stay in a trend?
Click to expand...

Chris - have you tried adding a Parabolic SAR to your chart? This can be used as a trailing stop whilst the market is trending, though it won't work when the market is rangebound.

iceman
 
TheBramble

Thanks for the advice, wise words indeed!
What you say makes sense, as hindsight in this game is a wonderful thing! :rolleyes:

Hampy

Excellent point ref 2 contracts, I shall give it some further investigation. I've based the strategies on 1 contract for starters, so maybe limiting myself somewhat.

Thanks for the help guys
Chris
 
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