Staggering your entries

[mumuy]

The benefits of staggering your entry are that you minimize your risk since you do not place one single entry, and that this will maximize your profits by placing multiple entries in your trading. By having a solid trading strategy it will produce best results and that by maintaining your trading plan only a few minor change can be made in staggering your entry levels.

By doing so it lessens the risk of losing, it mitigates that risk by using staggered trade entry tactics. However, lesser traders attempts to manage their entries by taking a position at some points of resistance or support and then adding size to that trade as price move against their initial stage. For more details and examples, try to read the following articles.


http://www.paxforex.com/forex-blog/stagger-your-entries

http://www.spreadblogging.co.uk/201...taggering-your-spread-betting-entry-position/

 

[Rambo35]

Nice post. I do stagger my entries and it works well for me. I have never met a pro-trader who goes into a trade with only one entry. It is normal to have multiple entry level spread across a support or resistance zone.

 

[Fxpipper]

Same here..staggering your entries makes more sense, esp around times when market gets choppy which usually happens during imp news..

 

[Easy Trader]

I am just curious as to how long you guys hold trades on average, and the average distance in pips between entry orders. I understand the theory of it as far as investing in a vehicle one would think is going to appreciate /depreciate over time but in a short term even swing trading it has big flaws. To say it can't be done successfully, well.....I guess anything can be. All I can say is I personally tried this 4 years ago with the same price action method I use to date, and it didn't work. Lets take the PAXForex link example from above (which by the way is a Broker telling you its smart to place more orders! Think about it.) They have staggered their short orders in a 50 pip range, smaller orders first to then larger orders as you ride into drawdown, hoping that when price reaches the back of "said" resistance range you will then carry your full 1lot position out of drawdown and into profits. So here where it gets interesting when it comes to real time trading. On the surface your risk looks less (and is less) as you ride the drawdown. But if your analysis is wrong you still take a loss albeit less than a full 1lot 50pip loss but a 5 order loss, you have also paid out and not to mention consistently have to beat a 2pip(average) spread times 5. So now in 50 pips 10 of those belong to the broker and not you. That's 20%!!! One order with a strategically placed stoploss is 4%. So now the odds are getting slowly stacked against you....What makes it even worse is that in "real time" when your analysis is right you will usually trigger only 1-2 or 3 of your orders and carry them into profits which usually aren't runners and probably net 50-120 pips in profit if managed correctly. So your over all lot size winners are smaller than the lot size of the loosers not to mention still needing to consistently beat the spread x 3 on the winning side. It didn't work for me as far as trading is concerned. I tried it and found it to be a waist of energy. I think the only benefactor would be the broker. When it does work perfectly you have to have 4 orders ride into drawdown to then trigger the 5th and then turn you direction, which is stressful as hell. What the PAXForex link should have said was "you want to enter at 1.5850, you think 1.5900 is the end of the resistance range and anything past that is a wrong read of the market so a stoploss of 60 pips is needed. Take account balance divide by 60 pip stop and you can only afford a (example) .20lot position not a 1 lot position....
This is how "pro-traders" trade and exibit money management. Simple, get in-get out, I was right-I was wrong. Damn my order never got triggered I'll wait for the next one.

 

[hayseed]

staggering trades

hey easy..... your question was not directed at me but I have spent a tremendous amount of time studying order placement .... this includes untold amount of time back testing in an effort to determine whether or not going all in with a single order or staggering in orders is of realistic value....

i'll post some real trade chart examples later where you can actually see the time and pips difference...... it's not uncommon for me to have 50 open orders at a time on a single pair.... my largest ever total open on a single pair was probably 300 or so.....

here are some examples here..... please disreguard my stop hunt comment..... I was just clowning around with words.....h

 

[Easy Trader]

hey easy..... your question was not directed at me but I have spent a tremendous amount of time studying order placement .... this includes untold amount of time back testing in an effort to determine whether or not going all in with a single order or staggering in orders is of realistic value....

i'll post some real trade chart examples later where you can actually see the time and pips difference...... it's not uncommon for me to have 50 open orders at a time on a single pair.... my largest ever total open on a single pair was probably 300 or so.....

here are some examples here..... please disreguard my stop hunt comment..... I was just clowning around with words.....h

OMG hayseed !!!WOW!.......Thank you for linking me to actual pics. But to say your shot gunning the market would be a understatement. I have seen EA's like this in my old days but I wouldn't classify this as scaling in the sense that I was referring to but something else totally, more like scalping the whole price range. But I don't know your exact strategy. Do you have a scalping feed or standard spread feed?

 

[hayseed]

all in

hey easy..... just a standard feed......

you had mentioned on the other thread about preferring to go all in instead of staggering trades..... often that is best, or so it seems to me......

in the case of trading extreme momentum it's common for the price to walk away from the limit orders and never look back..... here is an example of the gbpusd where it fell so hard the limit orders never had a chance of filling..... this is similar to what you mentioned.....

here also is the nzdusd..... sometimes you just can't count on the price moving against the initial trade enough to activate the staggered limit orders..... so i'll have stop orders in addition to the limit orders..... something is going to get filled.....

when trading the weekly or monthly charts, i'll for sure stagger orders..... there is just so much slack in the candles at those timeframes......

as opposed to fixed in place limit and stop orders, true trailing limit and stop orders are a definite plus...... this allows for the orders to adjust/trail in step to the price as it moves..... h

 

[Easy Trader]

If you feel it is often better to place one order as opposed to staggering, why do ya do it hayseed? Your poor mouse finger. You obviously seem to be comfortable/confident with it. I understand what your doing, its just hard for me to dial it in because I'm not sure at what candle your orders were placed on the charts so the method to the madness still eludes me. What is the benefit that it gives you, especially on a 1H chart and so close together. How does the standard spread impact the size of the price moves you have to capture? My impression is that even with a decent move the profits of the (say!?!) first 2-3 orders would be voided completely. How do you manage them when your analysis is wrong and half of the orders get triggered and the market moves sideways holding you in 10-20 pips of pure spread drawdown??? To me (and this is what I found in my own testing) it forces the trader to consistently capture bigger chunks of the market to achieve the same thing? It also played madness with my ROI stability. I present this as a honest conversation between two traders who obviously make money but have very different applications.
edit: the pro trader remark was only a jab at a remark made up top. There are no pro traders, just successful and unsuccessful ones.

 

[hayseed]

often always

If you feel it is often better to place one order as opposed to staggering, why do ya do it hayseed? .

//---
hey easy..... cause often is not always..... there are sometimes when staggering orders is clearly an advantage....

take for instance this post from april 2nd......

it seemed irrational to me that both the nzdusd and audusd were near all time highs when their trading partners were in dire staits.... so i shorted them both beginning in april this year.... but knowing the markets can stay irrational longer than we can stay solvent, i staggered the trades..... as they both fell and profit grew i continued to add orders.... at certain times the orders will be very close, and at other times they will be far apart......

the cost due to spread will usually be the same for a single standard lot order as it will be for ten mini lot orders..... and actually there will be an slight chance that the cost of spread will be greater for the single larger order..... i do not consider spread as a factor at all....


How do you manage them when your analysis is wrong and half of the orders get triggered and the market moves sideways holding you in 10-20 pips of pure spread drawdown???

i lose money in that case...... as an example, a few hours ago i closed out almost 7 standard lots, because i was wrong, and made a whopping 12$...... drawdowns in the thousands don't bother me, but if my analysis is wrong it's foolish for me not to correct the situation.....


it forces the trader to consistently capture bigger chunks of the market to achieve the same thing

i believe you are absolutely correct..... someone that shorted the audusd in april a single standard lot when my much smaller first order was placed would have made more in 300 pips than i made in the entire 1500 pip fall.....

but it's not always about staggering trades per se.... imagine some trading long only using the monthly chart..... rather than place a single large trade on the 1st, they might place a single smaller order at every macd cross or something on the 30 minute chart.....

my preference is the weekly and monthly charts, but place orders with the 15 and 30 minute charts.....h

 

[Easy Trader]

Hayseed thanks for the clarification. I believe I understand your approach now.

 

[Rambo35]

I am just curious as to how long you guys hold trades on average, and the average distance in pips between entry orders. I understand the theory of it as far as investing in a vehicle one would think is going to appreciate /depreciate over time but in a short term even swing trading it has big flaws. To say it can't be done successfully, well.....I guess anything can be. All I can say is I personally tried this 4 years ago with the same price action method I use to date, and it didn't work. Lets take the PAXForex link example from above (which by the way is a Broker telling you its smart to place more orders! Think about it.) They have staggered their short orders in a 50 pip range, smaller orders first to then larger orders as you ride into drawdown, hoping that when price reaches the back of "said" resistance range you will then carry your full 1lot position out of drawdown and into profits. So here where it gets interesting when it comes to real time trading. On the surface your risk looks less (and is less) as you ride the drawdown. But if your analysis is wrong you still take a loss albeit less than a full 1lot 50pip loss but a 5 order loss, you have also paid out and not to mention consistently have to beat a 2pip(average) spread times 5. So now in 50 pips 10 of those belong to the broker and not you. That's 20%!!! One order with a strategically placed stoploss is 4%. So now the odds are getting slowly stacked against you....What makes it even worse is that in "real time" when your analysis is right you will usually trigger only 1-2 or 3 of your orders and carry them into profits which usually aren't runners and probably net 50-120 pips in profit if managed correctly. So your over all lot size winners are smaller than the lot size of the loosers not to mention still needing to consistently beat the spread x 3 on the winning side. It didn't work for me as far as trading is concerned. I tried it and found it to be a waist of energy. I think the only benefactor would be the broker. When it does work perfectly you have to have 4 orders ride into drawdown to then trigger the 5th and then turn you direction, which is stressful as hell. What the PAXForex link should have said was "you want to enter at 1.5850, you think 1.5900 is the end of the resistance range and anything past that is a wrong read of the market so a stoploss of 60 pips is needed. Take account balance divide by 60 pip stop and you can only afford a (example) .20lot position not a 1 lot position....
This is how "pro-traders" trade and exibit money management. Simple, get in-get out, I was right-I was wrong. Damn my order never got triggered I'll wait for the next one.

How do you know the short orders were 50 pips away and they started with smaller orders first and then went bigger? Looks like you don't know how to stagger your entries correct, which does not make it wrong.

I have been trading for a living and I have never met a single pro-trader who went in at one entry point. You also mention 1.0 lot positions which makes no sense to me. Staggering your entries does not depend on lot size and if an example of 1.0 lots was given it was done to show a numerical example.

You need to stick to your risk management and not over-trade and staggering does not alter your risk management at all. For example you want to trade 0.10 lots, rather than placing one entry at x-price you divide it into two and place 0.05 lot orders. Your total exposure does not change and staggering is not a strategy to follow it is an entry approach to complement your strategy and improve efficiency.

The fact that you tried and failed had nothing to do with staggering your entries, it shows your strategy was not good and from what you state I assume is still not good. Don't confuse staggering entries with a martingale strategy.

Just a side note: Pros don't use stop loss orders to close trades at losses, that is what retail traders do. Pros use a stop loss to close a trade at a profit.

 

[Easy Trader]

How do you know the short orders were 50 pips away and they started with smaller orders first and then went bigger.

Because I read the link and that was what the example said.

I have been trading for a living and I have never met a single pro-trader who went in at one entry point. You also mention 1.0 lot positions which makes no sense to me. Staggering your entries does not depend on lot size and if an example of 1.0 lots was given it was done to show a numerical example.

Because again, 1.0 lots were given in the example I understand numerically it can be any risk tolerance....The rest of the paragraph I'll leave alone.

You need to stick to your risk management and not over-trade and staggering does not alter your risk management at all. For example you want to trade 0.10 lots, rather than placing one entry at x-price you divide it into two and place 0.05 lot orders. Your total exposure does not change and staggering is not a strategy to follow it is an entry approach to complement your strategy and improve efficiency..

Everything you do effects your risk exposure. If you split your orders on 1yrs worth of trades you will get a vastly different outcome than not splitting them, with all other things (MM, trade management etc.) being the same. My opinion from my own experience is that it hurts the consistency, stability, and over all dollar amount of returns. When implemented on a intraday-swing trade time frame.

The fact that you tried and failed had nothing to do with staggering your entries, it shows your strategy was not good and from what you state I assume is still not good. Don't confuse staggering entries with a martingale strategy..

I know the difference between staggering and martingale, I was using the example in the link given. I asked you guys(who do it)how exactly you were doing it but no one commented.....Hayseed actually indulged me and he was never in the original post. From what Hayseed has shown me (TY Hayseed), "To me" he takes his analysis/bias from a mostly larger scale view, weekly/monthly which is strongly rooted on fundamentals, he then covers an entire price range with orders on a lower timeframe to pinpoint reversals etc. Why he does this I do not know, my assumption is its either liquidity issues with his contact sizes, or its just a method that he is comfortable with. But he is still operating from a longer term-fundamentals mindset and dropping down TF's for accuracy. Its not subject to market noise and he is (to the best of my knowledge)not looking for intraday/swing pip values. He is IMO short term investing. Now I do realize I saw a small snap shot and it probably is not the whole trading skill-set that he uses. Go back and carefully read his replies to my questions, If anyone has a idea he does based on his method.

Just a side note: Pros don't use stop loss orders to close trades at losses, that is what retail traders do. Pros use a stop loss to close a trade at a profit.

This comment I will use only as a break in my post as its all it is useful for.
To again clarify my belief based upon my experience. Staggering trades on a intraday-swing trade basis will force the trader to capture larger moves in the market. A negative curve will be created over a long period of trades because the traders losses on average will consist of a larger amount of contracts than the profit side. You are in effect trading a negative risk:reward over the long term. Also adding in the extra cost of spreads that are paid out of pocket on the loosing trades and giving up those profits on the winning trades. The over all success of the system/method being traded will increase or decrease this negative curve, but it is none the less one more dynamic that is stacked against the trader in the long term. This is not to be confused with placing more orders with the same bias via pullbacks, s/r areas. These would be considered individual orders unto themselves at key levels. Large firms do scale positions on a longer term but this is mainly because they are trading contract sizes so large that liquidity is a problem at this level. They may want to sell off but the market doesn't have the volume of buyers to their sell orders. They often need to manipulate the market and they would place more buy orders at resistance to lure in buyers in the market (usually breakout traders) and then quickly sell their contracts off to them in a zone above and below resistance(in this case) hense the large wicks @ support/resistance. For these firms trading millions of dollars scaling is for the most part a necessary evil. I'm sure they would love to liquidate those large positions with one click of the mouse...........
Edit: What is being referred to here as scaling is a trader placing orders 5-15 pips apart trying to capture 50-70 pip moves, the negative curve almost becomes an insidious backdrop to the traders account much like an inflation.

 

[hayseed]

Looks like you don't know how to stagger your entries correct, which does not make it wrong.
.

//----

hey rambo..... what would be the correct way......h

 

[hayseed]

Why he does this I do not know, my assumption is its either liquidity issues with his contact sizes, or its just a method that he is comfortable with..

//-----

hey easy..... your correct, it's just a method i'm comfortable with....

my lot sizes are normal .... the ibfx mini account will use 0.1 up to 1 mini lot max for each entry.... the etrade standard account uses 1 mini lot minimum to 1 standard lot maximum for each entry.....

my view on this subject can best be seen below in the daily, weekly and monthly usdjpy charts from a couple months ago....

on the weekly chart notice where the tsr changed to green.... just about 78.... still today have 2 open orders there......

now, -just for example-, from that point, 78, imagine placing another buy order at every 60 minute positive macd cross below the 0 line as long as the weekly tsr was green and the highest order placed was positive.... in very little time you'll have quite a few orders..... this is my preferred manner to stagger trades or scale in.... it will have very few losses.....

the combined lot size will eventually far exceed what would have been possible to place as an initial single order .... i had to slowly scale in.....

occasionally on the strong pull backs, most of the orders will close.... this is due to don wordens suggestion not to hold excessive trades thru countertrend swings.....

when the dust settles and daily/weekly/monthly trends resume, i'll slowly start it again......

as we both know, adding to losing trades while increasing lot size as in the paxforex article example often ends badly unless the trader has extreme self control.....h

 

[Rambo35]

Because I read the link and that was what the example said.



Because again, 1.0 lots were given in the example I understand numerically it can be any risk tolerance....The rest of the paragraph I'll leave alone.



Everything you do effects your risk exposure. If you split your orders on 1yrs worth of trades you will get a vastly different outcome than not splitting them, with all other things (MM, trade management etc.) being the same. My opinion from my own experience is that it hurts the consistency, stability, and over all dollar amount of returns. When implemented on a intraday-swing trade time frame.



I know the difference between staggering and martingale, I was using the example in the link given. I asked you guys(who do it)how exactly you were doing it but no one commented.....Hayseed actually indulged me and he was never in the original post. From what Hayseed has shown me (TY Hayseed), "To me" he takes his analysis/bias from a mostly larger scale view, weekly/monthly which is strongly rooted on fundamentals, he then covers an entire price range with orders on a lower timeframe to pinpoint reversals etc. Why he does this I do not know, my assumption is its either liquidity issues with his contact sizes, or its just a method that he is comfortable with. But he is still operating from a longer term-fundamentals mindset and dropping down TF's for accuracy. Its not subject to market noise and he is (to the best of my knowledge)not looking for intraday/swing pip values. He is IMO short term investing. Now I do realize I saw a small snap shot and it probably is not the whole trading skill-set that he uses. Go back and carefully read his replies to my questions, If anyone has a idea he does based on his method.



This comment I will use only as a break in my post as its all it is useful for.
To again clarify my belief based upon my experience. Staggering trades on a intraday-swing trade basis will force the trader to capture larger moves in the market. A negative curve will be created over a long period of trades because the traders losses on average will consist of a larger amount of contracts than the profit side. You are in effect trading a negative risk:reward over the long term. Also adding in the extra cost of spreads that are paid out of pocket on the loosing trades and giving up those profits on the winning trades. The over all success of the system/method being traded will increase or decrease this negative curve, but it is none the less one more dynamic that is stacked against the trader in the long term. This is not to be confused with placing more orders with the same bias via pullbacks, s/r areas. These would be considered individual orders unto themselves at key levels. Large firms do scale positions on a longer term but this is mainly because they are trading contract sizes so large that liquidity is a problem at this level. They may want to sell off but the market doesn't have the volume of buyers to their sell orders. They often need to manipulate the market and they would place more buy orders at resistance to lure in buyers in the market (usually breakout traders) and then quickly sell their contracts off to them in a zone above and below resistance(in this case) hense the large wicks @ support/resistance. For these firms trading millions of dollars scaling is for the most part a necessary evil. I'm sure they would love to liquidate those large positions with one click of the mouse...........
Edit: What is being referred to here as scaling is a trader placing orders 5-15 pips apart trying to capture 50-70 pip moves, the negative curve almost becomes an insidious backdrop to the traders account much like an inflation.

So the example used 1.0 lots and 50 pips in order to illustrate it. You asked how it is done, and you can hate my answer but I am not here to walk you through.

We can agree to disagree on this as you have formed your own opinion and clearly stated that you do not understand how it is done. You speak of experience which I respect. I speak of experience myself and you always mention it wont work on an intra-day price swing.

Since you do not understand it and according to your own believe it does not work for x-amount of reasons you mentioned my solution to you is rather simple: don't use it.

I am almost sure you set your SL to close trades at a loss and tell yourself that is the right thing to do. Again, we don't have to agree on how to trade. You do what you think is right and trade in a manner which suits you. I do the same.

We can debate back and forth, but I will not share how I trade step-by-step and we can agree to disagree on this topic. One thing we can agree on is that retail trades different that pros and not just for the reason you pointed out which is large orders.

 

[Rambo35]

//----

hey rambo..... what would be the correct way......h

Do you currently stagger your entries?

 

[Easy Trader]

We can debate back and forth, but I will not share how I trade step-by-step and we can agree to disagree on this topic.

I wish you would have mentioned this at the top of the thread. Not for me but for the new traders out there desperately trying to put the pieces together.......agreed to disagree if fine by me.




Thank you again Hayseed, and some nice positioning on the JPY to boot!

 

[hayseed]

hey rambo..... yes, occasionally.... just check the trades on the charts posted above.....

however, it seems to me there are situations where it's best to place a single large order......h

 

[Rambo35]

hey rambo..... yes, occasionally.... just check the trades on the charts posted above.....

however, it seems to me there are situations where it's best to place a single large order......h

As you know trading is not science, it is an art form and you need to understand when it is wise to do so. I don't think a single large entry is every a good idea, but again that is just my opinion.

My best advice is that you keep track of your trades and see when it worked for you and when not. After you have enough data you will be able to get a better idea and streamline your approach while you also learn when it works best for you and when not.

 

[Rambo35]

I wish you would have mentioned this at the top of the thread. Not for me but for the new traders out there desperately trying to put the pieces together.......agreed to disagree if fine by me.

Thank you again Hayseed, and some nice positioning on the JPY to boot!

Those who are serious about trading will put the pieces together. You learn by trying and making mistakes. I am in this forum to offer a point of view and trading approach shared my (let's say) the majority of successful and professional traders and each individual can decide if it is right for them or not.

At least it is out there so new traders have a different avenue to research and test, if only the popular opinion is stated new traders have no choice; I want to give them choice and at least a chance to know which direction to go.

Most will follow popular advise which sounds great to the majority and with that in mind the majority always fails at trading. I think hayseed is on the right track and can learn it over time so it works for him. If one trader gets something positive out of this, I am glad.