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In a message dated 98-04-29 16:45:05 EDT, GREHERT@xxxxxxx writes:
<< Assuming a Goal Exit equals a Trailing Stop Exit in a computer back tested
system, in real life the Goal Exit will be far superior to the trailing stop
exit since it avoids the intraday-slippage as well as the more severe
Opening-
slippage.
One problem with using a Goal is you still need a money management stop so
you're still subjected to slippage.
>>
Trading for Target
A few quick notes on trading for target after reading about your "goal exit"
strategy.
I daytrade the S&P/DJ on a daily basis. One of the things I have gotten
through my thick skull is to ALWAYS trade more than one contract. This enables
me to set
a target for the first (if trading a 2 lot) and allows me to give my second
"runner" contract room to run. This does 2 things for me pyschologically:
1.) It allows me to take a profit almost immediately if I am in a winning
trade. This makes me feel good and be happy. It gives me CONFIDENCE that my
methodology
works (at least for me) and will help me pull the trigger on my NEXT trade.
More importantly:
2.) It allows me to give more room to my "runner" contract to run. Once I hit
target,
I am fulfilled psychologically (ie. I was "right" in my entry). I do not have
to worry
about leaving ALL my profits on the table. I can let that runner run as far as
it can go.
Eventually, I begin trailing a stop on the runner, depending upon price
action, etc...
I KNOW I will get stopped out. I also KNOW I will not get the best price
possible.
But I don't care. I made money, I've had a confidence booster, and I am ready
for the next trade.
Trading 1 lots is fine. I'm sure there's zillions of you off the floor traders
making money scalping on 1 lots. But I can't make money doing it. I can (and
do) make money trading for target.
Hope this is useful
Peter
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