Time Stops, 4

continued from yesterday...

How soon should a Time Stop be executed? There's a answer in Financial Freedom Through Electronic Day Trading

At pages 239 to 240 of that book there is a section about “Timed Exits” The authors describe Timed Exits as a strategy that “is a favorite of the accomplished EDAT [Electronic Direct Access Trading] traders…The rule for the time stop is…2 to 5 times my trading time frame. Since I trade 1-minute cancles, I’;ll give the trade anywhere from 2 minutes up to (in rare circumstances) 5 minutes to sotp me out or move in my direction…”

The authors explain that “You entered a trade because you recognized a valid setup and then got an entry signal. Now it’s several minutes later and nothing is happeing…So by staying in the trade, you’re just hoping…Just get out and look for another low-risk entry. Naturally, I will reenter if my setup occurs again after taking a timed stop.”

...going on holiday until September 1, 2008 ...

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Copyright 2008 Raymond T. Lee. All rights reserved.
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