Steve here is my limited advice to holding a position as it moves against you set a stop loss and stick to it and don't look tick by tick. If you can't look away maybe your size is too big? I had to do this as I built my position before the last I1 sell date so I suffered a significant drawdown before the cascade
Hi Charles, My problem isn't with the size of the position. It is 5% so it does not concern me. My problem is that I am transitioning from trading just with the short-term I1 rule set to include the longer-term trade. The rule set that goes along with the short-term I1 trade is incompatible with a longer position. I have to set stops that expose me to 4 times the loss potential in order to stay in the trade. I've traded with I1 so long that I view that as just giving money away. I could just keep a longer-term trade in the model positions and not actually trade it. The stop would be another dimension away from where I currently set stops using the short-term I1 rules. For instance, with short-term I1 I set the stop 1.2% beyond the DJI M/A. Period. I always stay in the direction of that M/A except when I initiate trades on turn dates. I've learned through thousands of trades to get the stops right. I agonize over them. Now, hey, just set them far away, and then just walk away...I am researching using a 12-day M/A of DJI +1.3%. This looks promising in conjunction with longer-term I1 trades. Thanks for the comment.
Steve
ReplyDeletehere is my limited advice to holding a position as it moves against you
set a stop loss and stick to it and don't look tick by tick. If you can't look away maybe your size is too big? I had to do this as I built my position before the last I1 sell date so I suffered a significant drawdown before the cascade
Hi Charles,
ReplyDeleteMy problem isn't with the size of the position. It is 5% so it does not concern me. My problem is that I am transitioning from trading just with the short-term I1 rule set to include the longer-term trade. The rule set that goes along with the short-term I1 trade is incompatible with a longer position. I have to set stops that expose me to 4 times the loss potential in order to stay in the trade. I've traded with I1 so long that I view that as just giving money away. I could just keep a longer-term trade in the model positions and not actually trade it. The stop would be another dimension away from where I currently set stops using the short-term I1 rules. For instance, with short-term I1 I set the stop 1.2% beyond the DJI M/A. Period. I always stay in the direction of that M/A except when I initiate trades on turn dates. I've learned through thousands of trades to get the stops right. I agonize over them. Now, hey, just set them far away, and then just walk away...I am researching using a 12-day M/A of DJI +1.3%. This looks promising in conjunction with longer-term I1 trades.
Thanks for the comment.