Hi Everybody,
This is a question I get asked a lot, and it is “when do I move my initial stop to protect open profits”. With EOD trading we have the 100% initial risk level, but this is too close for normal day trading, so we only use the 100% guideline when the larger degree picture is uncertain. Otherwise we want to let the market have some more “wiggle room”. But the question is how much ?
Well, this depends on how the market is unfolding. A good example is on the TS3 long on the 3min ES yesterday. Here the market was making its second swing higher, so a “logical” place for the stop is now juts under the last pivot low.
At least this had your stop at a small profit, so if the market turned (which it did) you came out with a small profit (and not a loss)
But there are no hard and fast rules on this, it all depends on how the market is unfolding, so this is where common sense comes in.
Thanks, Steve
This is a question I get asked a lot, and it is “when do I move my initial stop to protect open profits”. With EOD trading we have the 100% initial risk level, but this is too close for normal day trading, so we only use the 100% guideline when the larger degree picture is uncertain. Otherwise we want to let the market have some more “wiggle room”. But the question is how much ?
Well, this depends on how the market is unfolding. A good example is on the TS3 long on the 3min ES yesterday. Here the market was making its second swing higher, so a “logical” place for the stop is now juts under the last pivot low.
At least this had your stop at a small profit, so if the market turned (which it did) you came out with a small profit (and not a loss)
But there are no hard and fast rules on this, it all depends on how the market is unfolding, so this is where common sense comes in.
Thanks, Steve
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