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Prob w/ Early Exits using Trailing Stops
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SalimHira
Posted 2/5/2012 10:45 PM (#3411)
Subject: Prob w/ Early Exits using Trailing Stops



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I am testing below and having problems understanding if the logic is correct. I have included below a sample to provide a general idea but not sure if I am on a correct path or not. and need some guidance. I am also kind of lost in the "Stop Parameters" fields if they are all in sync. Currently, I am being stopped out while the ES is simply basing, sometimes within 30seconds or so.

The problem I am having is in directional move - say the stock has moved in my direction for example 3-atr, but trailing stop only moved 1-1.5atr, and stock reverses and takes me out at 1.5atr, when I wanted to capture most of profits closer to 3-atr, but here again, I want to still keep myself in the trade and not get stopped out close to 3-atr .. why Ed suggested to use the trailing pivot stop. I also found or think, your trailing stops do not move (during basing, after say, 3atr move) till volatility comes in or price bar moves to next timeframe bar (i.e., 5min), by than it's too late, and I am taken out. I may be mistaken, but that's how I felt in today's trading test experiences.

1). I simply (wish if it were that easy :-) ) would like the tradeplan to do following for the E-mini trades:

a). Alleviate my fear of success: by not allowing me to get out early by taking profits early

i). currently, to the contrary, it's behaving as it takes me out a little late, and I tend to giveaway quite a bit of profits back to the market.

b). Limit/Stop loss - not be whipsawed by getting out early before the trade is in my favor, but doing so when I am really wrong and take me out.

2). I removed the Breakeven condition, as it did not make sense since I have the fixed stop and trailing stop.

3). Working with 5-minutes timeframe ... in conjunction with watching the larger 15min, and lower 2 or 3min. ...

4). I am still fiddling with the parameters, but not accomplishing appropriate behaviour.


Any suggestions, comments, enhancements appreciated. Thank You in advance.

B/ Rgds., -Salim


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Thread moved by JimDean on 2/23/2012 7:21 AM from OTEC Techniques (confidential) > Custom TradePlans (Stocks) > Prob w/ Early Exits using Trailing Stops


Attachments
Attachments tp01.png (170KB - 3 downloads)
Attachments tp02.png (153KB - 3 downloads)
Attachments tp03.png (146KB - 1 downloads)
Attachments tp04.png (148KB - 1 downloads)
Attachments tp05.png (139KB - 1 downloads)
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JimDean
Posted 2/23/2012 7:40 AM (#3426 - in reply to #3411)
Subject: Prob w/ Early Exits using Trailing Stops



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Hi, Salim:

I've moved this to the Strategy Development Discussions room, since it's really a pretty general question/issue. (your other comments were moved to the Futures and Forex Room).

The Tradeplan that you've shown uses a couple of custom trailing stops (click here for aJDstTraiNfixed and click here for aJDstTrailFixedATR) which are documented in the OLang Stops room (use OTED Search in top left). You also use a Trading Session Boundary stop, which is sensible for RT trading, and an NSP Breakeven stop.

Since the NSP stop is a Nirvana black box, I tend to shy away from it, and use things that I fully understand. So I can't help you much there. Have you tried your TP without it? Are you sure it is truly helping you? Sometimes simpler is better.

Re stopping out early ... it's a hazard of trading.

General solution - loosen your stops. (Duh.) However, usually the key word "early" implies that you want to have reasonably tight stops later on.

That's what the aJDstTrailNfixed stop is designed to do ... it keeps the stop loose at first, then tightens it after a reasonable profit is obtained.. I suggest that you try working with that stop for a while and try different parameters with it.

Another general solution - change your strategy so that your entry signals don't fire so soon. Wait till a trend is confirmed before entering it. Sometimes you can do this by adding filters that prevent entry if there is a price-resistance level too close to the entry point. You might consider using Wave Trader or MoneyZone functions to determine where an upcoming resistance level might be. That's a fairly complex thing that should be discussed separately though.

I hope these general comments help. If you want further assistance I suggest that you narrow down your focus a bit and provide a better overview of your strategy &/or entry systems.

Thread moved by JimDean on 2/23/2012 7:21 AM from OTEC Techniques (confidential) > Custom TradePlans (Stocks) > Prob w/ Early Exits using Trailing Stops

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SalimHira
Posted 2/23/2012 9:21 PM (#3427 - in reply to #3411)
Subject: Prob w/ Early Exits using Trailing Stops



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Hi Jim:

Thanks for the feedback. I had taken out the NSP b/e realizing not sensible. Currently I am only working with aJDstTraiNfixed and aJDstTrailFixedATR, and it is doing a phenominal job - but I am still playing around with the parameters for appropriate results.

Jim says:
[Another general solution - change your strategy so that your entry signals don't fire so soon. Wait till a trend is confirmed before entering it. Sometimes you can do this by adding filters that prevent entry if there is a price-resistance level too close to the entry point. You might consider using Wave Trader or MoneyZone functions to determine where an upcoming resistance level might be. That's a fairly complex thing that should be discussed separately though. ]

You hit the nail, Man, you are really really good in processing thoughts. I mentioned to Angela and Ed in separate comments that I like the MZ stops and how it behaves and need help to implement that kind in my TP, but did not translate at the time, most likely, due to its complexity as you say, and to explain in a short time we had.

Ed did mention to look into the fulcrum, and many traders are doing well with it, but flip side is, can get whipped with comm. costs.

Hopefully, you are able to assist as I do have all 3 plugins, and, I did attempt, but tended to be beyond my comprehension the cushions, tresholds, and when I saw negative treshold like -3 in a stop - I let it go :-), before asking for trouble.

I'd really like to hear some thoughts and ideas on how to attempt & utilize the MZ and WT functions. Thank You again for all your help.

Thread moved by JimDean on 2/23/2012 7:21 AM from OTEC Techniques (confidential) > Custom TradePlans (Stocks) > Prob w/ Early Exits using Trailing Stops

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JimDean
Posted 2/23/2012 9:43 PM (#3428 - in reply to #3427)
Subject: Prob w/ Early Exits using Trailing Stops



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WT and MZ stuff, re filters, should be discussed either in the Filters room or in the rooms dedicated to WT and MZ plugins.

This will be something that I'll spend a lot of time on eventually, but using the verbal/video method since there is a lot to it. The WT and MZ documentation lays a decent foundation. FrankO's book expands a lot on the MZ stuff. It's a big topic.

You might consider playing around with combining the two OLang stops into a single one ... that is, use the "Flex" logic AFTER a profit target is reached, with a fixed-loss stop prior to that time. By combining the two, you won't have the Flex stop taking you out too soon, but you won't lose its benefits once the trend has started to run. I don't have time right now to do that coding, but it would not be terribly complex.

Another aspect to this is something that I *will* be covering soon - using OmniScan to find pre-qualified stocks that have a lesser tendency to "act up/misbehave". More on that later ... again, a big topic.

Thread moved by JimDean on 2/23/2012 7:21 AM from OTEC Techniques (confidential) > Custom TradePlans (Stocks) > Prob w/ Early Exits using Trailing Stops

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