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Bob,
you misunderstand my statement. Believe me, the market couldn't care less what
your profit objectives are. (It doesn't know what they are... how could it
care?). If you're telling me you develop your objectives based upon S/R levels
(and that the market cares about those), then that's something else.
Best Regards,
Bill Vedder
Bob Heisler wrote:
> I couldn't agree more about having a plan before entering any trade that
> includes both the risk and reward side. But as far as the market not caring
> about your profit objectives, I couldn't disagree more.
>
> IMO your objectives should in large part be based upon previous price action
> where the market has determined S/R levels. Therefore the market will
> "care" a great deal about your objectives and especially so at certain key
> levels. Other factors can influence a trade including environmental items
> such as volatility, strength of trend (if any), strength/weakness of the
> tape, etc., but Price and Price action should be the primary focus. And you
> won't be able to see this very clearly (if at all) using 1-minute or smaller
> charts.
>
> In terms of how long to hold a trade, again I let the price action make that
> decision for me whenever possible. As long as the trade "isn't doing
> anything wrong", - i.e. if long is the market making higher highs and higher
> lows; is resistance being broken and then acting as support, etc., then I
> will try and stay with it and possibly add to the position.
>
> Some judgment is required when trading but Price can tell you a great deal
> if you learn to understand what the chart is telling you.
>
> Bob Heisler
> www.rjhtrading.com
>
> ----- Original Message -----
> From: "Bill Vedder" <bved01@xxxxxxx>
> To: "Michael Berger" <mberger@xxxxxxxx>
> Cc: "OmegaList" <omega-list@xxxxxxxxxx>
> Sent: Sunday, April 08, 2001 5:38 PM
> Subject: Re: Bulletin 44 Switch Time Frames For Better Exits
>
> > Michael,
> >
> > Thanks for the post. I was especially interested in hearing your
> > comments re:setting profit objectives (No.3 below).
> >
> > To me, a profit objective, determined before the trade is entered, is a
> > reasonable approach for setting risk/reward numbers, etc. A "plan" is a
> > good thing to have and this is the approach I generally follow. However,
> > as you say, the market couldn't care less about your objectives and,
> > knowing that, I will tend to reevaluate the objective in light of the
> > market's moves since postition entry. This has met with limited success;
> > some continue to move in the right direction and some don't.
> >
> > Can you share what method(s) do you use for exits? or is it just a
> > streamofconsciousness thing?
> >
> > Best Regards,
> >
> > Bill Vedder
> >
> > Michael Berger wrote:
> >
> > > Just a few comments on the submission below:
> > >
> > > 1. When someone suggests "switch time frames ... snip
> > >
> > > 2. I don't know what Dr. Elder does now... snip
> >
> > > 3. Price objectives.
> > > I have been trading futures for 30 years.... snip
> > >
> > > Not once in 20 + profitable years of trading have I
> > > used a profit objective. Nor have I ever met, or heard of a
> > > successful trader who has. On the other hand I have know
> > > many traders
> > > who never made much money because their profit objective was
> > > reached, and they missed the big move. And these same
> > > traders are often the type constantly picking a top or
> > > bottom. The only bottom this seems to pick is the equity in
> > > their account.
> > >
> > > The market cares little about your position, where you
> > > established it, what you think is an appropriate profit, or
> > > loss. There are countless strategies one could employ as to
> > > how to determine which way the market wants to move.
> > > Setting a profit objective has never been one of them.
> > >
> > > As a footnote, I see at the bottom of this posting
> > > is a system for sale that "contains sound logic that should
> > > work very well for picking bottoms in stocks." SHOULD
> > > work? Picking bottoms? I think I've said enough on this
> > > topic.
> > >
> > > Regards,
> > >
> > > ----- Original Message -----
> > > From: "Ed Kiers" <rokinseq@xxxxxxxxxx>
> > > To: "Jimmy Snowden" <jhsnowden@xxxxxxxxxxxxx>;
> > > <redeemed10@xxxxxxxxx>; "Omega" <omega-list@xxxxxxxxxx>
> > > Sent: Sunday, April 08, 2001 4:36 AM
> > > Subject: Fw: Bulletin 44 Switch Time Frames For Better Exits
> > >
> > > > As a contribution to the "different timeframes" posts.
> > > This is from Chuck Le
> > > > Beau's website.
> > > >
> > > > Ed Kiers
> > > >
> > > >
> > > > ----- Original Message -----
> > > > From: "The System Traders Club "
> > > <traderclub@xxxxxxxxxxxxxx>
> > > > To: <traderclub@xxxxxxxxxxxxxx>
> > > > Sent: Friday, April 06, 2001 7:35 AM
> > > > Subject: Bulletin 44 Switch Time Frames For Better Exits
> > > >
> > > >
> > > > ----------------------------------------------------------
> > > --
> > > > The Traderclub Forum: Traders Club Bulletins: Bulletin 44
> > > > Switch Time Frames For Better Exits
> > > > ----------------------------------------------------------
> > > --
> > > >
> > > > By webmaster (Admin) on Thursday, April 5, 2001 - 10:35
> > > pm:
> > > >
> > > > Bulletin #44
> > > >
> > > > Switch Time Frames For Better Exits
> > > > By Chuck LeBeau
> > > >
> > > > I just returned from a weeklong Trader's Camp hosted by
> > > Dr.
> > > > Alexander Elder in a beautiful island nation in the South
> > > > Pacific called Vanuatu. When I studied geography in school
> > > > many years ago, Vanuatu was known as the New Hebrides
> > > > islands. Vanuatu is located about 1,000 miles west of
> > > Fiji.
> > > >
> > > > If you have read Elder's excellent book, Trading For A
> > > > Living, you will recall that Dr. Elder is an advocate of
> > > > using multiple time frames for trading both stocks and
> > > > futures. For example, he suggests looking at the weekly
> > > > chart to make sure that the weekly trend is firmly up
> > > before
> > > > trading the long side of a market based on the daily chart
> > > > patterns. This approach makes good sense and I highly
> > > > recommend his book and his strategy.
> > > >
> > > > While listening to Dr. Elder explain his multiple time
> > > frame
> > > > strategy for entries, my thoughts wandered to the
> > > > application of his ideas to my favorite subject - exits.
> > > > One of my goals in trading is to find exit strategies that
> > > > do a good job of protecting open profits. One method of
> > > > accomplishing this goal is to simply move the daily stops
> > > > closer once a specific profit objective has been reached.
> > > > However, it might also make sense to simply switch to a
> > > > chart with a shorter time frame once we have reached a
> > > > reasonable profit objective.
> > > >
> > > > Here is an example of how such a strategy might work.
> > > Let's
> > > > say that we have been trading XYZ stock on an intermediate
> > > > term basis using daily charts. The trade is working out
> > > > very well and we now have six ATRs of open profit. (See
> > > > previous Bulletins for an explanation of how to use
> > > Average
> > > > True Range to set profit targets). Up to this point we
> > > have
> > > > been using our well-known Chandelier trailing stop placed
> > > at
> > > > 3 ATRs below the high point of the trade.
> > > >
> > > > However, now that we have reached our primary profit
> > > > objective we want to tighten up our stop to protect more
> > > of
> > > > our profits. We could reduce our Chandelier stop from 3
> > > ATRs
> > > > to 2 ATRs and continue using the daily bars or we could
> > > > switch our chart to one hour bars and continue to trail
> > > the
> > > > Chandelier exit at 3 ATRs based on the intraday one-hour
> > > > bars. The basic idea is to switch to a chart with a
> > > shorter
> > > > time frame once we have reached our profit objective.
> > > This
> > > > procedure should allow us to let our profits continue to
> > > run
> > > > but we would be protecting our open profits with much
> > > closer
> > > > stops by using the chart with a much shorter time frame.
> > > >
> > > > Combining our exit strategy with Dr. Elder's entry
> > > strategy
> > > > would provide the following sequence: for entries we first
> > > > examine the weekly chart and then use the daily chart to
> > > > trigger the trade. Once we are ready to exit our trade we
> > > > examine the daily chart and then trigger our exit using
> > > the
> > > > hourly chart.
> > > >
> > > > Of course this strategy would require some extra work as
> > > > well as the use of intraday data. The alternative would
> > > be
> > > > to simply reduce the number of ATRs used to hang the
> > > > Chandelier exit on the daily chart. Either way we do it,
> > > > the logic is to move our stops closer once we have
> > > achieved
> > > > a worthwhile trading profit.
> > > >
> > > > * * * * * * *
> > > > Notes On Bear Markets
> > > >
> > > > One of the best ways to gauge a bear market is to observe
> > > > the reaction to good and bad news. In a bear market the
> > > > averages go down even when the news is good. (For
> > > example,
> > > > look what happened the last time the Fed cut interest
> > > > rates.) We will know that the bear market is finally over
> > > > when we observe the market reacting favorably to good
> > > news.
> > > > In the meantime, we can take some consolation in the fact
> > > > that at the present rate of decline we will soon be at
> > > zero.
> > > > At least at that level we should be able to safely resume
> > > > trading stocks from the long side.
> > > >
> > > > * * * * * * *
> > > > April Systems Sale - Any Six Trading Systems for $1,000
> > > > (Save $500)
> > > >
> > > > Order your systems before April 15th to take advantage of
> > > > this special offer. The usual price of our trading
> > > systems
> > > > is $250 each so now is the time to save money if you were
> > > > planning on buying systems from us. All systems operate
> > > > using end of day data and all rules and code are fully
> > > > disclosed. Many members have purchased systems just to see
> > > > the logic and to get ideas they might use in developing
> > > > their own systems. For example, the Phoenix Bond system
> > > > contains sound logic that should work very well for
> > > picking
> > > > bottoms in stocks. Now there is an idea whose time has
> > > > come!
> > > >
> > > > * * * * * * *
> > > > Last Reminder - April Workshop in Los Angeles on April
> > > 14th
> > > > and 15th Go to the Home page of our web site at
> > > > www.traderclub.com or phone Chuck LeBeau at (310) 265-9776
> > > > for more information or reservations. (I lost some of my
> > > > e-mail messages while traveling so please phone me to
> > > > confirm your attendance if you plan on attending.)
> > > >
> > > > We will also be doing a Workshop with Dr. Elder in New
> > > York
> > > > in May. You can get more information on his web site at
> > > > http://www.elder.com
> > > >
> > > > * * * * * * *
> > > > Good luck and good trading. Lets hope this dreary bear
> > > > market ends soon.
> > > >
> > > > Don't forget to check the interesting discussions on our
> > > > Forum at http://www.traderclub.com/discus/board.html
> > > >
> > > > Our Forum pages on the web site contain very active and
> > > > interesting discussions about trading. New messages are
> > > > posted every day. Our Forum is rapidly becoming one of
> > > the
> > > > most active trading discussions on the web. You are
> > > invited
> > > > to participate.
> > > >
> > > > If you need more information send email to:
> > > >
> > > > chuck@xxxxxxxxxxxxxx
> > > >
> > > > Chuck Le Beau's System Traders Club
> > > > http://www.traderclub.com
> > > > ph 310-265-9776
> > > > fax 310-265-9556
> > > >
> > > > ----------------------------------------------------------
> > > --
> > > > DO NOT REPLY TO THIS MESSAGE! This is an automatic
> > > e-mail
> > > > message from the Traders Club Forum.
> > > >
> > > > Use this link to go directly to the discussion:
> > > > http://traderclub.com/cgi-bin/discus/show.cgi?107/1400
> > > >
> > > >
> > > >
> >
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