Setting the BE correctly?

[islandwizard]

Since we are discussing NT, I want to talk about another issue on automating the break even.

So for example, I create an order management strategy for 2 contracts. I set the 1st with x as my stop loss and y as my target. I then set the 2nd contract with x as my stop loss and w as my target (w = 2y). I then set the profit trigger for the 2nd contract to the variable y.

So what should happen is that once target y is hit on my 1st contract, the 2nd contract's stop loss should move to BE. If this is not correct, please let me know. I think this will work fine.

Now final question. Let's assume I believe the highest probability of y being reached is if y = 4. I also believe y = 6 is a very good probability. Now using these values for y and or one of your suggestions, what is the best value to set w at or is using w as 2y good enough to meet standard risk vs reward setting and good trade management?

Finally, do you have a link of just showing how to set the 2nd contract so that the stop loss goes to break even when the 1st contract hits it's target without all those advanced strategies like auto trail which I don't need?

[NinjaTrader_TylerG]

Hello islandwizard,

Your understanding of the ATM strategy parameters and Auto breakeven is correct, and the settings you have described will work as you expect.

The strategy you describe (using the same value you used for your first profit target as your profit trigger for Auto breakeven) will move your stop loss for your second ATM target to your market entry price. It will be completely up to your own judgement to decide if these settings are a good balance of risk versus reward.

You will not need to use Autotrail to accomplish what you have described in your last question. The Auto breakeven settings that you have outlined above will move the stop loss to breakeven. You would only need to use autotrail if you wanted to continually adjust your stop loss as the current market price moves upward.

Please let me know if I can assist you further.