magellan2 did/does. 2-3 pips(?)...5500% in 1 month...
I use extremely tight stops. Consequently my ratio of profitable to losing trades is terrible, but I make up for it with their average sizes.
Problem with such a strategy is that it isn't to the tastes of many people. When I started I found it psychologically very difficult to deal with the long runs without a win.
Sorry, just realised that I forgot to answer that originally.
Averages out at around a 5:1 ratio of profit:stop size (all losing trades are hit the stop).
2-3 pip stop I think it is not doable at live trading if u use Abn or Oanda ...
tar this is what Maggi did at ABN, 1 pip spread quite regulary on this pair:
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Excellent stuff !
You either are or you are on your way to becoming one very rich man !
That is true tar, Maggi said so himself.
They let him scalp trade this way quite a long time also in his real accounts where he worked some magic too, but at some point started making it harder for him.
Accordingly he said he was going on to a direct access broker.
But that is what I keep saying: the strategy as such works perfectly, but you do need a direct access broker if you want to keep doing this long term.
Yeah I know Sim, choppy times.
Anyway I love the way you trade, hope you can get back at it again soon.
You are in great company mate:
http://www.trade2win.com/boards/forex-strategies-systems/45996-tro-test-results-13.html#post582574
magellan2 did/does. 2-3 pips(?)...5500% in 1 month...
refering to this competition has no meaning. but it is abundantly clear that tight stops work for some people ubt is not viable for most strategies
Stops - the most difficult issue in trading, at least IMHO.
How tight your stops are, surely is dependant on how good entries are. Attached is a chart of this mornings Aussie API with an example of a very good entry where a very tight stop would have been appropriate. No - I didn't take the trade - I was out this morning. I don't believe that there is any dichotomy between tight stops and logical stops. Trades should only be taken where tight stops are appropriate.
The chart is a constant volume 50 contracts per bar. The black line on the price plot is VWAP. The second from top plot is a smoothed "market delta" - difference between trades executed at ask and at the bid. Third plot from top is smoothed "order book delta" - the ratio all contacted offered in the book (5 levels) to all contracts in the book (10 levels). The latter has a range 0 to 1.
Lower plot shows a couple of smoothed CCIs.
Notice the change in supply and demand during the bounce off the VWAP. Number of trades at the ask rises sharply as does the number of contracts offered. Remember that markets generally move to liquidity.
VWAP is an important S/R point for many SIFs. The CCIs are oversold, and for most of the preceeding period the high order book delta is indicative of a bullish market.
Put all of these together and it seems clear that a tight stop is very appropriate.
For anybody taking the drivel on the TRO threads seriously, compare and contrast this chart to the rubbish over on those threads.
A stop can be tight upon immediate entry, but that's just one approach. If your approach is based upon hitting a zone sandwiched between various prices then stops are used differently but within a tight risk/money management scheme, so your stops are 'tight' to your risk area. As i've mentioned before, stops are just another order type to be used, so use them in a realistic manner to your own proven approach, style and market conditions. You shouldn't be using stops as a weapon to attack other posters on chat forums, that's not really what a stop order is for....hehehe.
you are correct
Annyway a to tight stop loss isn't good as well, the price has to have a little bit room to move.
but this also depends on what pair you'll be using.
Some of them are way to volatille to use a close stoploss.