Scaling Out Strategies

[traderbrazil]

Hi!
I have been daytrading futures for about 6 months (mainly YM, NQ and 6E) and I would like to improve my exit strategy.
I have just read the article below from Michael Gutmann regarding different strategies for scaling out of positions:
Calibrating Profit and Loss Strategies | Banking & Finance > Financial Markets & Investing from AllBusiness.com
I currently trade 2 or 3 contracts with a all-in/all-out strategy but I suppose that I could improve on it using multiple profit targets.
I have been thinking about setting PTs at 10 and 20-points and letting the 3rd contract run with a trailing stop.
Any ideas are welcome!

 

[rathcoole_exile]

many people will try to dissuade you from this approach of multiple exits.
with a 3 car trade, they focus on the "opportunity loss" sustained by not having 3 cars open at the most advantageous exit point.
But for me, I like to focus on reducing the risk asap, by closing up to B/E (or thereabouts) asap.

On the ES, I usually trade in multiples of 3.
Example:
target 1 is 1 handle (4 "ticks")
target 2 is 2 handles (8 "ticks")
Move safety Stop to -2 (-8)
Let target 3 be a Runner.

So what can happen sometimes is a Scratch trade, (+1, +2, -2) with the +1 paying for Commissions etc
If stopped out for Scratch and the reasons for the original trade are still ok, re-enter a new trade and start again.

It works for me, but it may not be entirely suitable for you.
the point is though, BE YOUR OWN MAN - when the negative nay-sayers come on telling you to only trade all in/all out, as I'm sure they will, only YOU should decide on your own approach.

don't let yourself be swayed by anyone (including me)

good luck

 

[traderbrazil]

many people will try to dissuade you from this approach of multiple exits.
with a 3 car trade, they focus on the "opportunity loss" sustained by not having 3 cars open at the most advantageous exit point.
But for me, I like to focus on reducing the risk asap, by closing up to B/E (or thereabouts) asap.

On the ES, I usually trade in multiples of 3.
Example:
target 1 is 1 handle (4 "ticks")
target 2 is 2 handles (8 "ticks")
Move safety Stop to -2 (-8)
Let target 3 be a Runner.

So what can happen sometimes is a Scratch trade, (+1, +2, -2) with the +1 paying for Commissions etc
If stopped out for Scratch and the reasons for the original trade are still ok, re-enter a new trade and start again.

It works for me, but it may not be entirely suitable for you.
the point is though, BE YOUR OWN MAN - when the negative nay-sayers come on telling you to only trade all in/all out, as I'm sure they will, only YOU should decide on your own approach.

don't let yourself be swayed by anyone (including me)

good luck

Thank you very much for your reply!
Regarding your "3rd runner car", do you use a discretionary exit strategy?
I was thinking about either using a larger PT such as 6-8 times the ATR of the timeframe I'm trading or the low/high of the last 3 or 4 bars.
Thank you once again!

 

[rathcoole_exile]

Thank you very much for your reply!
Regarding your "3rd runner car", do you use a discretionary exit strategy?
I was thinking about either using a larger PT such as 6-8 times the ATR of the timeframe I'm trading or the low/high of the last 3 or 4 bars.
Thank you once again!

varies, with Pivot Points, 50% daily ATR, sentiment via Pit Audio, etc all playing a big part.

If you don't subscribe to a Pit Audio service, I strongly recommend that you do so - live commentary direct from the trading floor will add a whole new dimension to your trading.

(note however that the most popular services focus on the ES, so may not be entirely relevant for YM, NQ etc)

 

[traderbrazil]

varies, with Pivot Points, 50% daily ATR, sentiment via Pit Audio, etc all playing a big part.

If you don't subscribe to a Pit Audio service, I strongly recommend that you do so - live commentary direct from the trading floor will add a whole new dimension to your trading.

(note however that the most popular services focus on the ES, so may not be entirely relevant for YM, NQ etc)

Great input! Many thanks!
I will be working on different scenarios and hopefully I will find a strategy that suits my style...

 

[fakhar]

Dear,

you must try multiple exits and i think you will love it. I trade NQ with 3 contract sets and after first target(that is 8 ticks) move stop to breakeven. in this way, I am more confident and relax in my trading.
Fakhar

 

[rathcoole_exile]

cheeky fakhar (only works for those familiar with Cockney accent..)

 

[traderbrazil]

Dear,

you must try multiple exits and i think you will love it. I trade NQ with 3 contract sets and after first target(that is 8 ticks) move stop to breakeven. in this way, I am more confident and relax in my trading.
Fakhar

Ki Fakhar!
Thanks for replying!
What is your strategy with the two contracts left?

Thanks!!!!

 

[fakhar]

Ki Fakhar!
Thanks for replying!
What is your strategy with the two contracts left?

Thanks!!!!

Dear,
I have different strategies for exiting the trade. Whenever i do scalping, i place stop one tick above/below high/low of the bar but obiously i stopd out quickly. Often i wait for a big move favoring me then place my stop at retracement.Scalling out is an important part of money management and its more important than entry.
thanks
Fakhar