How do people take profits?

[munchiedude]

No mate, that is actually the whole point. If the market can see where your stop is, it doesn't matter where your entry was - expect to get some pain. If you put your stop right next to a neon flashing light that says "here is my stop" , as it would be behind a swing low/high, then you have to expect it to be taken out.

The HH/HL thing is great in forums, and in books, but pretty unreliable to trade. Unless the sh!t is hitting the fan, you should try fading into these HH's / HL's (and reverse), because that's where all the stops are likely to be.

hi FQ,

thanks for a little insight into the cons of the stop and replace. i completely agree that this technique would make it sceamingly obvious where my stop is and its def not good. what i do tend to do is place the stop a few pips below the sup lvl if going long of the last swing high as to avoid being stopped out due to fluctuations.

i would say the point of this moving stop is to trail and lock in profit whilst allowing room for the trade to potentially develop further and as such it does not matter if i get stopped out as that is the point of this and ideally would be stopped out with a profit.

bearing in mind that im a noob, i will give the fading idea a go at a later stage, still trying to build the fundamental blocks atm

 

[munchiedude]

I commonly use multiple time frames to identify a setup to get in. I use the LOWEST time frame's EMA 13 and EMA 39 cross to get out. If I have had a parabolic move like the recent action in gold I tighten it to a EMA 5 and EMA 13 cross. Works exceptionally well for me.

Here is a double long gold ETN that I bought when I had a weekly, daily, and 60 min buy signal. You can see that as the move started it was normal 30-45 degree angle to the uptrend. The 13,39 EMA cross never triggered a sell. As the move accelerated and became more parabolic I tightened the stop to the 5,13 EMA cross and sold at 70.20 on 8-22-11. Even if you had used the 13,39 EMA cross you still would have taken the meat out of the trend.

This was my biggest trade of the year.

thanks eegozi for your input. as per the original post, does your method enable you to maximise profits and give guidance for exiting if the market moves sharply in your favour?

 

[Masquerade]

I find the best answer in these times is fast

I've had so many positions go from profit and then i'd try run it and off it goes into a loss. I don't know what your style of trading is, but it's best to take an achievable profit. Get out, wait and then go again. If the market's trending it's a different matter, but in these highly volatile times I really don't want to be hanging around in trades trying to squeeze out a few extra pips.

 

[munchiedude]

I find the best answer in these times is fast

I've had so many positions go from profit and then i'd try run it and off it goes into a loss. I don't know what your style of trading is, but it's best to take an achievable profit. Get out, wait and then go again. If the market's trending it's a different matter, but in these highly volatile times I really don't want to be hanging around in trades trying to squeeze out a few extra pips.

hi masq,

my style of trading is called "wing it" atm until i develop something a bit more robust, but its coming along!

fast is def the case, i agree with the scenario that you have mentioned, its also something that i and at least i other member have fallen foul of. perhaps looking for ideas to how other traders control the exit in this scenario so as to maximise gains!

 

[Masquerade]

I am guilty of it myself, just yesterday I had a euro trade - market looking bullish, i'm long. I see about 20 pips profit. I decide to hold as it seems the right thing to do and I feel yesterday was the day 1.45 breaks. It sort of stalls and I deliberate taking profit, but I decide to hold. Sure enough +20 becomes -60. I didn't take any chances this morning

If you're a pure TA guy though you kind of have to just base it on lines and levels etc.

 

[munchiedude]

I am guilty of it myself, just yesterday I had a euro trade - market looking bullish, i'm long. I see about 20 pips profit. I decide to hold as it seems the right thing to do and I feel yesterday was the day 1.45 breaks. It sort of stalls and I deliberate taking profit, but I decide to hold. Sure enough +20 becomes -60. I didn't take any chances this morning

If you're a pure TA guy though you kind of have to just base it on lines and levels etc.

classic example happening now on eurusd! where to take profit?

 

[Masquerade]

I had an order at 1.4475, missed it by about a pip. I took everything off at 1.4467. I was thinking breaking 1.45 should be feasible but now i'm not so sure as I thought it'd do it yesterday and it didn't.

 

[munchiedude]

still in, cancelled and replaced stop from 1.4474 to 1.4460. broke h1 sup at 1.4428, still in.

 

[munchiedude]

cancelled and replaces s/l to 1.4433, key sup lvl. locking in profit.

 

[munchiedude]

cancel and replace from 1.4433 to 1.4428, nxt sup lvl, locking in profit. still in as macd and stox both down still.using m1 chart.

 

[munchiedude]

ok closed at 1.4425 for a modest +16.7 pip profit. see where it goes now but these kind of moves phase me. i stepped down to the m1 chart and noticed the downtrend weakening and for the first time the trend reversed and made a higher high. using m1 for cancel and replace areas as jason suggested worked well, thanks jase.

i think going back to OP topic, if i moved to b/e after a fixed amount of pips, i may have missed further profit.

 

[Masquerade]

I tried moving stop to B/E before, I never really got on with it and stopped doing it. It doesn't make sense to move your stop to where it is for the sole reason of B/E. Your stops should be at a place which invalidates your entry decision rather than just to save your P&L.

 

[munchiedude]

i totally agree masq and just looking at the price action, ive obviously forsaken some profits there by not sticking with the stop and replace and in hindsight, need to ensure that the M1 timeframe is ultimately not entire reliable but a good first trade!

the stop and replace works well for me as even if the trade went against me at the later stages, i was still locking in 5-10pips profit. maybe consider tightening the stops nearer the desire R:R profit value?

 

[Masquerade]

This is something different, but just be aware that in trading you will lose. So make sure you're not losing a lot more than your winning trades. If you're locking in 5-10 pips which isn't much in the grand scheme of things you're going to be stopped out a lot. Also the spread becomes more substantial to your underlying. Not sure why you pick M1, but if it suits you then go for it. What spreads are you covering on your trades?

 

[munchiedude]

i am aware that in trading people can lose and loss should be expected. its how much you lose vs how much you win that matters and i think thats important. i use the experience from being a consistently profitable poker player and try to apply positive expectancy situations to trading which i deem as having many factors similar to poker but knowledge and experience wise, im fairly new to trading.

i use the M1 as i trade off the M5 charts in a day trading style. im using SLM at as my sb provider and their spread is 1.5pips on the eurusd which is not too bad considering their support, service and ease of use has been very good so far.

 

[Jason101]

Hi Mr Munchie,

This is my stops on a gold short today, as you can see I have moved my stop 4 times.
My entry was in the green box on 15m t/f.
But I found my stop moves on the 5M t/f. I personally would find 1m very hard.

 

[munchiedude]

Hi Mr Munchie,

This is my stops on a gold short today, as you can see I have moved my stop 4 times.
My entry was in the green box on 15m t/f.
But I found my stop moves on the 5M t/f. I personally would find 1m very hard.

lol, i dunno when i became "mr munchie" as opposed to munchie

good looking trade there jason, one question, does the red line represent your stop losses? if so, how did you determine the first stop loss @ 1758.2? as when i look at the chart, im not seeing swing highs where you placed that stop?

what was the logic that determined the placement there?

 

[Jason101]

This is it on the 5m, as I looked at it to place stops.

The 2 green lines are alert alarms, if it goes above top one I will consider getting out.
If it goes below the bottom one I shall probably pyramid.

I have no interest in predicting which way it will go.

When I first looked at the trade, it was on the 1h, so as in your op, it was parabollic.

 

[munchiedude]

This is it on the 5m, as I looked at it to place stops.

The 2 green lines are alert alarms, if it goes above top one I will consider getting out.
If it goes below the bottom one I shall probably pyramid.



When I first looked at the trade, it was on the 1h, so as in your op, it was parabollic.

I have no interest in predicting which way it will go.

does this mean you're applying a straddle strategy?

 

[Jason101]

lol, i dunno when i became "mr munchie" as opposed to munchie

good looking trade there jason, one question, does the red line represent your stop losses? if so, how did you determine the first stop loss @ 1758.2? as when i look at the chart, im not seeing swing highs where you placed that stop?

what was the logic that determined the placement there?

Hi, I this was more of a s/r line in the sand, sort of a Darvos Box type. It seemed like an area of lots of orders, that once defined could hold for a few bars.

The blue boxes are where I was looking.

I am having a problem loading the image, but i was looking at around midnight to 5.30am. I will load it later if I can.

Price movement has slowed now so I may not pyramid now, if lower alarm is triggered. I have to get on with tiling my bathroom now.