DrSp,
I have to say something right off here. Your last two posts have been a little irritating. Up above, you asked me if I was long, short or both on a swing -- "or both"...what is that? And when I answered and gave you the links to the trades and/or the discussion of how the trade would go, you suggested I do it "the same day if not in real time." Those posts were "same day" and one of them actually was in real time (actually about 15 minutes late, I was busy in real time). There, having said that, I'm going to assume you are well intentioned here, if somewhat imprecise in your language, and not trying to actually insult me somehow. I do appreciated your questions, regardless, because they make me sit up and think.
So having gotten that off my chest, let me say, I'm not trying to post in real time. I admire those who can do it, but I don't really care about real time posting. It's inconsistent when you're trading, sometimes you're too busy to update at the moment it happens, or if you have more than one thread going sometime you can just forget until later, blah, blah, blah... And, although I most often post same day, I don't always think that matters much either since mostly what I'm posting is a methodology of trading an indicator (for me the best indicator) and the history of trading that methodology, warts and all, hopefully to help anyone who's interested with how I try (and sometimes, often...struggle) to get it right. This is about trying to keep my head on straight too.
I assume the two percent stop system you have worked out, using SPY (which, like QQQ, I happen to dislike) and IWM is working well for you and that's great because that's what has to be done by every trader (and investor too). One has to have a system, a methodology of buys and sells and stops, that not only makes money but is also one with which one can be emotionally comfortable. I'd love to hear more details on how it's going as you go forward, and I suspect everyone else would to.
Since the subject here is how to manage a stops within a swing, I'd like to call attention to one of the links above (
THIS ONE) that has talk about when to end a trade. I said in that link:
I usually start out with a five percent stop in case all hell breaks loose like today. Then sometimes I would just like TZA or TNA to be above its open 15 minutes into the market or I begin to get nervous (the best trades go your way right away). If those hold, then the next daily up tick or down tick in the NYMO or in the Russell IS a place to take some profits or seek some safety depending on the action at the time. Or maybe, if one has the risk tolerance and the stamina, one might want to hold until the next low above a low (that generally is what it takes to capture big moves like the up swing in June and the hard drop in July).
I also watch standard deviations. TZA during the July drop was at one point during that run up 100 percent. Holy cow! Anyone fortunate enough to be holding that would be, in my mind, a fool not to grab that profit (it finished up 58 percent from close to close on the signals we're talking about here, which was not bad either).
Basically it always takes discipline, persistence and experience and each of those are personal to the individual trader. I guess one could say put the play on and play defense the second after you do, and especially in times of big volatility.
Let's walk back through this swing so far:
This swing was a buy on the close Aug. 26th on the NYMO low above a low.
The five-percent-all-hell-breaks-loose stop noted in that quote did not happen (thank you, thank you, thank you).
Next is the potential "nervous" stop around the on 15-minute bar. I played defense on TNA's chops through the open on Aug 30 and closed half my TNA for a bit more than a 12 percent gain (actually post that in near real time
HERE).
Having locked that half, the trade (of course) promptly went on and left that half in the dust and finished that day up close to 17 percent.
So, when next to play defense?
Well, standard deviations... There was a time on yesterday (Aug31) when TNA was up at three standard deviations of an average trade on this signal (21 percent at the peak, three sdevs!). That would be a splendid sell into strength moment. Having been up there, TNA dropped back down through its open that day at up 18.5 percent and that would have been splendid too. At the end of that day, it was up 16 percent on the swing, and given the pattern of falling profits during that day, that close would not have been a bad spot to bail. (I jumped out of my second half on one of those but since I didn't post anything more than the possibility of doing that in the quote above, it doesn't matter which or when.)
So that brings us to today...
Simple. The NYMO is down today and so is TNA (as I've said before "breath and price today is a continuation signal for tomorrow") so as far as I'm concerned, this swing ends now with TNA up approximately 7.8 percent. Not a bad five-day swing return all on its own.
What now? There are still lows above low in the NYMO and a rising NYSI. So, until that changes, I think it is still buy the dips.
Hope all this is helpful.
Good luck and good trading.
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