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Question on stop Losses (scalping)


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Question on stop Losses (scalping)

  #1 (permalink)
 donovanshane 
Chattanooga, TN/USA
 
Posts: 26 since Jan 2013

I scalp the /es. When I say scalp I mean I buy a 2 lot, and look for a 1 tick move. This is $25 profit. I do this.....a lot during the day. 50+ trades. My winning trades hover between 75-80%. What I have noticed in my journal is if I could manage my stop losses better I would not be doing just good, but great (yeah, no brainier right?). Here's the issue. I do not have a set stop loss. Scalping is more of a feel for me. If I set my stop loss at 2 ticks, my winning % would be a lot lower. It routinely goes against me a tick or two, just to instantly recover and hit my 1 tick profit. I do not know if this is institutions, HFT's or just great freaking traders taking out peoples stops before it takes off. But either way a SET 2 tick stop loss would take a lot of my winners away. That being said,at least one time a day I have that trade that moves against me 2 ticks, I m watching it seeing if its going to go back up or if I need to get out there....when it tanks 2-5 more ticks on me and I have my biggest loss of the day. If I trade 50 times, my percentage is 40 winners and 10 loosers. All 1-2 ticks. But 90% of my losses come in 1 or 2 trades. Any thoughts....or just practice makes perfect? Thanks guys.


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  #3 (permalink)
 
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 tturner86 
Portland, Oregon
 
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donovanshane View Post
I scalp the /es. When I say scalp I mean I buy a 2 lot, and look for a 1 tick move. This is $25 profit. I do this.....a lot during the day. 50+ trades. My winning trades hover between 75-80%. What I have noticed in my journal is if I could manage my stop losses better I would not be doing just good, but great (yeah, no brainier right?). Here's the issue. I do not have a set stop loss. Scalping is more of a feel for me. If I set my stop loss at 2 ticks, my winning % would be a lot lower. It routinely goes against me a tick or two, just to instantly recover and hit my 1 tick profit. I do not know if this is institutions, HFT's or just great freaking traders taking out peoples stops before it takes off. But either way a SET 2 tick stop loss would take a lot of my winners away. That being said,at least one time a day I have that trade that moves against me 2 ticks, I m watching it seeing if its going to go back up or if I need to get out there....when it tanks 2-5 more ticks on me and I have my biggest loss of the day. If I trade 50 times, my percentage is 40 winners and 10 loosers. All 1-2 ticks. But 90% of my losses come in 1 or 2 trades. Any thoughts....or just practice makes perfect? Thanks guys.

Are you doing this live or in sim?

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  #4 (permalink)
 donovanshane 
Chattanooga, TN/USA
 
Posts: 26 since Jan 2013

Live

  #5 (permalink)
 kevinkdog   is a Vendor
 
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donovanshane View Post
I scalp the /es. When I say scalp I mean I buy a 2 lot, and look for a 1 tick move. This is $25 profit. I do this.....a lot during the day. 50+ trades. My winning trades hover between 75-80%. What I have noticed in my journal is if I could manage my stop losses better I would not be doing just good, but great (yeah, no brainier right?). Here's the issue. I do not have a set stop loss. Scalping is more of a feel for me. If I set my stop loss at 2 ticks, my winning % would be a lot lower. It routinely goes against me a tick or two, just to instantly recover and hit my 1 tick profit. I do not know if this is institutions, HFT's or just great freaking traders taking out peoples stops before it takes off. But either way a SET 2 tick stop loss would take a lot of my winners away. That being said,at least one time a day I have that trade that moves against me 2 ticks, I m watching it seeing if its going to go back up or if I need to get out there....when it tanks 2-5 more ticks on me and I have my biggest loss of the day. If I trade 50 times, my percentage is 40 winners and 10 loosers. All 1-2 ticks. But 90% of my losses come in 1 or 2 trades. Any thoughts....or just practice makes perfect? Thanks guys.

If your average win is 1 tick, and your average loss is 2 ticks, with an 80% win rate, after commission I'm figuring you average $1 per contract per trade net. With a 2 lot, that is $100 per day. Am I close?

Or am I making some bad assumptions (like I assumed $4 RT commission, maybe you have an exchange seat and have lower commissions)??

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  #6 (permalink)
 UTA990 
chicago
 
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there is an old saying from the floor....you cant eat like a bird and poop like an elephant. so if you are taking 1-2 ticks out of the market you cant lose 5 ticks. make your stop 2-3 ticks when your "feel" is in sync with the market and try to hang on a little longer to winners to tip the math back in your favor. just my 2 cents

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  #7 (permalink)
 donovanshane 
Chattanooga, TN/USA
 
Posts: 26 since Jan 2013


kevinkdog View Post
If your average win is 1 tick, and your average loss is 2 ticks, with an 80% win rate, after commission I'm figuring you average $1 per contract per trade net. With a 2 lot, that is $100 per day. Am I close?

Or am I making some bad assumptions (like I assumed $4 RT commission, maybe you have an exchange seat and have lower commissions)??

A bit more. Per this thread, its not a set 2 tick loss. Its also not a set 1 tick win. Yes....most of my wins and losses are all 1 tick. But I do have the occasional 2 tick win/loss. I'm averaging $200-$250 per day gross. Commissions are pretty average at $3.50 per round trip. If I could stop my biggest loss of the day everyday, I would really be doing well. That is what I am trying to figure out.

  #8 (permalink)
 kevinkdog   is a Vendor
 
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donovanshane View Post
A bit more. Per this thread, its not a set 2 tick loss. Its also not a set 1 tick win. Yes....most of my wins and losses are all 1 tick. But I do have the occasional 2 tick win/loss. I'm averaging $200-$250 per day gross. Commissions are pretty average at $3.50 per round trip. If I could stop my biggest loss of the day everyday, I would really be doing well. That is what I am trying to figure out.

What about setting a worst case stop to be about 4 ticks?

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  #9 (permalink)
 Itchymoku 
Philadelphia
 
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donovanshane View Post
A bit more. Per this thread, its not a set 2 tick loss. Its also not a set 1 tick win. Yes....most of my wins and losses are all 1 tick. But I do have the occasional 2 tick win/loss. I'm averaging $200-$250 per day gross. Commissions are pretty average at $3.50 per round trip. If I could stop my biggest loss of the day everyday, I would really be doing well. That is what I am trying to figure out.

You said 4.15 per round trip.

which is it?

wait aren't you the same guy who made this thread ?

Now you're live trading 50 times a day netting $200-$250?



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  #10 (permalink)
EnsoTrader
Durham, NC
 
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Sounds like you more data regarding MAE (Max adverse excursion).

You say 2 ticks against generally end up winners.
How many that hit 3 ticks turn and win? 4 ticks? etc.
Once you can chart out the win/loss rate based on ticks against, then you can determining a more appropriate hard stop level.

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Last Updated on November 11, 2014


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