Friday, February 15, 2013

Large stop fading

In an earlier post, I spoke about the difficulties of fading moves with a fixed stop and how larger stops such as half the prior bar may be more appropriate. Today's results are preliminary, but show how such a move may be put into action.

My standard 10t stop would have been taken out for trades #2 and #3 but a larger stop above half the fade bar (i.e. 21t above 42t long b5 and 17t above 34t long b10). These stops are effectively twice as large as what I'm normally comfortable with and I would need to find a way to somehow make these smaller.

The good thing about this approach is that during hard trends such as the first few swings today, a larger stop is likely to pay off better while for a tight range, the stops are likely to be smaller giving an overall reasonable risk:reward ratio.


  1. Cadaver: I want to thank you very much for all the great information you have put out for the last several years. I started from scratch about 4 years ago & your information as been invaluable to me and I am deeply grateful for that. After thousands of hours of work I am over the hump. Right now I am listening to your 4/23/12 Ytube broadcast & I am completely able to follow & understand your thinking. That's a big deal for me. Thank you Cadaver. I will be a contibutor to your site in 2013. I wish you and your family all the best.