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RE: Profit Stops



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<FONT face=Arial color=#008080 
size=4>Chuck
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It 
would be great if you could write a book just on stops. This would include all 
types of stops including the inactivity stop. Although I have read your material 
on ATR's I still do not have a good feel for them and exactly how they should be 
used and with what parameters. Should values be different for low and high 
volatility stocks as well as MFs and ETFs or does ATR take care of 
this?
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I also 
used two types of trailing stops. One is a protective stop order that I change 
daily, is looser, and can be triggered by the low of the day. The 
other is based on the close of the day. Should these be approached differently 
and with what ATR value? Would it be better to place the protective stop order 
based on lows?
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There 
is no book like this and we need one. Of course any insight would be appreciate 
here and now.
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<FONT face=Arial color=#008080 
size=4>Thanks, neo
 

  <FONT face=Tahoma 
  size=2>-----Original Message-----From: 
  owner-metastock@xxxxxxxxxxxxx [mailto:owner-metastock@xxxxxxxxxxxxx]On 
  Behalf Of CRLeBeau@xxxxxxxSent: Saturday, March 17, 2001 6:05 
  PMTo: metastock@xxxxxxxxxxxxxSubject: Re: Profit 
  StopsIn a message 
  dated 3/17/01 9:13:57 AM Pacific Standard Time, neo1@xxxxxxxxx writes: 
  <FONT lang=0 face=Arial color=#008080 size=4 
  FAMILY="SANSSERIF">
  <BLOCKQUOTE 
  style="PADDING-LEFT: 5px; MARGIN-LEFT: 5px; BORDER-LEFT: #0000ff 2px solid; MARGIN-RIGHT: 0px" 
  TYPE="CITE">Any thoughts on this?<FONT lang=0 face=Arial 
    color=#000000 size=3 FAMILY="SANSSERIF"> <FONT 
  lang=0 face=Arial color=#000000 size=2 FAMILY="SANSSERIF">I like to move 
  my stops closer as the profits get larger.  This allows me to have 
  fairly wide stops at the beginning of a trade  (the wide stops at the 
  beginning of a trade give a higher winning percentage) and then I try to 
  maximize the size of my winning trades by moving the trailing stops closer 
  so I give back less of the open profit.  This strategy is for trend 
  following type trades.   For counter-trend trades I just use 
  a profit target and when I see the profit I take it.  I have found 
  that counter trend trades generally tend to produce profits in the 
  neighborhood of 1.5 to 2.0 ATRs.  For trend-following trades I try to 
  tighten up my stops after 4 ATRs of profit and then hope for more. I'm 
  leaving for New Zealand this weekend to do a TraderCamp in Vanuatu with 
  Dr. Elder so I probably won't be able to answer any e-mail messages while 
  I am out of the country.  I'll be back in the office in April. 
  Chuck LeBeau www.traderclub.com