I've been testing Alexander Elder's Triple Screen system this year on my small live account, and it's been working quite well. I'm yet to lose a trade this year, and yet I'm quite worried. I feel the system's good, but I doubt I'm being patient enough with my trades. I've only managed to hit my take profit target a couple of times so far, most of my trades being stopped by the pair retracing to my stop loss. My philosophy is to aggressively protect my trades, protecting 50% of paper profits when the pair's risen sufficiently. I am yet to properly define "sufficiently". Part of me feels I should be moving to "break even" when the trade has moved at least a day's length in my direction (judging by price movement in the immediate prior days), thus giving the trade a lot of room to breathe and reach the take profit mark. However, I would not be happy if my trades were to bleed as much as 60 or 70 pips and end up as a "break even" trade.
My concern is that I'm "losing" almost as many pips as I'm banking, with my current take profit strategy. I'm not sure how well I'd survive a losing streak at this rate. I'm going to have to properly analyze my journal later, to see what might have happened if I'd given the trades more room to breathe.
On Wednesday January 25th, 2012 at 05:57PM by Evermore - Like - 0 People
I'm a swing trader and I move my stop to break even when the trade move the exact amount of pips i'm risking. This works very well for me, since I aim for 1:2, 1:3 and even 1:6 ratio.
Hope this helps.
On Saturday January 28th, 2012 at 01:09AM by pipsqueak79 - Like - 0 People
Thanks for sharing Evermore, that sounds like an interesting strategy. I might give that a try at some point...
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