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An effective way to control exits is with Parabolic SAR, which is also a good entry signal and can provide a trailing stop. Exits occur when PSAR reverses on the price line, and longs/short enter when the PSAR is below/above the price line. A PSAR trailing stop by definition ratchets closer to the line as a trade goes further into profit.
autumn
Very astute observation. It would be interesting to see if statistics could be developed to support the case. I expect that the situation corresponds to a steep movement of price line, but not of the whipsaw sort.
Yes I agree. When this happens the price action is steep and by the time the entry signal is reached the currency has already moved too far and lost momentum. Another thing I look for is if I have an entry signal say on the hourly chart at the US open and the currency moved 100+ pips (depending on the currency) just prior during the London session, I don't get in the market. After this much movement the currency has usually lost its momentum. Each currency will only move so much a day under normal conditions. Looking at flat or overlayed yellow and red says that the market has stalled and is then ready for a breakout. thx mike
I agree with the previous trader that said he gets out of bad trades as soon as possible. I have read and heard professional traders, including Dean, say to not ride out a bad trade. We know that synergy can make plenty of pips so I think the focus might be to try and diagnose bad trades and get out asap.
One thing I have noticed is if a good trade occurs, the candle pattern is stair step and it usually does not stall. I am going to try the following: if I get into a trade on the hourly chart and if 1 or 2 hours pass(1 or 2 closed candles) after entry with no positive pips then the currency has probably stalled so I will either move to breaken or close the trade. Another possibility is to close a trade if the currecny retraces x% (100-150%) of the entry candle pips. So if the entry candle closed with a spread of 50 pips, the trade would exit if the price move backwards 50 or 75 pips -if it moves back that far it probably has lost momentum and will retrace.... just brainstorming, thx mike
Since what we are talking about is momentum, perhaps the best way to measure it is with the .... Momentum Indicator. E.g. trigger long when above 100, trigger low when below 100. Or use crossings of 100. Has anyone tried it?
For comparison I have charted a Momentum indicator with a 3 period Smoothed MA applied to it. One could make a case that it strongly confirms the RSI and other signals: the Momentum line should be above/below the MA and above/below 100 for long/short entries.
I have been monitoring the progress of this work of art here and on the charts. I do not have consistent results to show you today, but am working on something which I can bring to the thread when ready. I am in search of a "step down feature" to add to my EA which will reduce the trade size with each loosing trade. So if you start with 5% in each trade, set max losses of 3 trades, after the first loss you are trading 4%, then 3%, etc. until you get to 0% or have reached you maximun preset consecutive losses in a row. This would allow me to run the EA for several days without worrying if it kept getting in consecutive loosing trades while I am away. Please help if you can, I think I am ready after this is added. Thanks!
B
An effective way to control exits is with Parabolic SAR, which is also a good entry signal and can provide a trailing stop. Exits occur when PSAR reverses on the price line, and longs/short enter when the PSAR is below/above the price line. A PSAR trailing stop by definition ratchets closer to the line as a trade goes further into profit.
autumn
Hi Autumn:
Thanks for the input as always, but...
Unless you have a diff/better setting to use for PSAR, I find that it does not help much. On a run like the lovely long one just ending on H1 GBPJPY, the PSAR works, but so do a lot of other exits. But with the runs that are shorter and end in a sudden large change in direction, the PSAR doesn't seem to help any more than using the PAC...
As far as your (and Mikes) other posts about momentum, perhaps that could be analyzed a bit more; could be promising.
Linear Mode
