Trading Target Candles, page-437

  1. 922 Posts.
    Right I see.

    Thanks Sharks,

    So basically, your thinking might be that 1 market transaction/position to but or sell counts as a singular trade, and therefore the risk is contained to whatever % you determine per trade.

    So for option 1 in a singular market move, you may have multiple trades which might equal up to say 10% drawdown risk at 1% risk per trade and 10 trades.

    For option 2, the drawdown is managed a bit more aggressively by moving all the stops of open trades up at the same time to limit drawdown, at the risk of them being taken out at the same time at the same point by a move against you.

    The difference of my thinking was that I was looking at a market move as a singular trade, so all market transactions/positions during say a bias long to a target would be considered as part of that overall trade, so more like option 2 than 1. So, if i had a trade with 1% risk, and i wanted to scale in with 10 positions, I would have to have either 0.1% risk per position or move stoplosses very aggressively, which results in, as you have said, higher chances of being taken out.

    Thanks for explaining what you did with that Sharks, i was trying to understand how other people approached multiple position trades.
 
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