Stops in the dax

[crude_lover]

I was wondering what are peoples views of using stops in the dax. I understand how volatile the dax can be in the sense you can put in a stop and have it hit only to have it then bounce back into profit. But also theres times when the dax runs away and if you havent got a stop in then you struggle to get out.
So to people trading the dax do you actively use stops or not, and if so what sort of stop do you use ie normal or trailing ?

 

[baron67]

It all depends on the TF you wish to trade, on very short TF's you might want to enter with a bracket order, personaly, i enter with ten points either way ( limit and stop), it's my standard bracket, and because they're within my view on the DOM i can grab them and move them as required, eg. drag stop to break even.
Sierra chart will allow me to adjust orders on the chart, that will make things easier.
IMHO i would not trade the DAX without a stop...think of it this way, if you are wrong on the current set up, take the loss, or better exit before it takes your stop, once the price action proves you wrong
Some times it has missed my stop by one point and then retraced by three or four points so i exit, and look for the new setup.
Keep in mind, though i'm an intermediate to advanced trader, i'm not very expirienced on the DAX.

 

[poster]

Well I too use 10 point stop and 10 point exit on DAX and once, I have achieved 5 points move in my direction, I make 5 points trailing stop to break even. Many times after entering a contract DAX moves 5 - 6 points in the other direction and then come back to my direction. So it is better to have 10 points stop.

 

[alexander]

I was wondering what are peoples views of using stops in the dax. I understand how volatile the dax can be in the sense you can put in a stop and have it hit only to have it then bounce back into profit. But also theres times when the dax runs away and if you havent got a stop in then you struggle to get out.
So to people trading the dax do you actively use stops or not, and if so what sort of stop do you use ie normal or trailing ?

In 2005 Michael Harris of tradingpatterns.com published an article in Traders' "FTSE and DAX Futures" where he analyzed the two markets from the point of view of what kind of risk/reward ratios are realistic and produce high profitability strategies. I think you can read it online at HOME or contact the publisher for a hard copy.

If I recall correctly the results of his study showed that the risk/reward ratio must be less than 1 and he attributed this to high volatility. With a ratio less than 1 the success rate must be high enough to compensate for the losses.

You brought up a very interesting subject.

Alex

 

[crude_lover]

its nice to hear everyones opinion i am personally using a 6 tick stop (i count the half ticks as a tick aswell some people dont). Some people have told me this is to little and whereas yes i may get stopped out just to have it reverse very quickly i find alot of the time in my trades it tends to go maybe 2-4 ticks offside before it re-traces or even alot of the time i can be straight away onside. Personally im a scalper so i hold very very close stops and if i get stopped out il most likely be back in ten seconds later.

Another question mostly for scalpers is when your onside a fixed amount how do you react to a retracement into your profit. For example say im ten ticks onside i will allow it to retrace 50% into my profit before i will cut it and take that profit. What does everyone else do ? As i've poke to numerous people a couple even add to the position on the retracement.