Profit taking Strategy wanted

[brianoliver]

Situation:
I work with a partner whom is rather bullish while I am rather conservative. It his money so he has the last say.

I have done some programming in the past, but not in recent years so am rather rusty.
I am new to Ninja trader.

I am looking for a strategy to automate our trading.

We often have trades that are showing tens of thousands of dollars in profit then loose the same due to not taking profits when available.

Objectives:

1 Stay in trade while the trend (long term) is favorable (Short or long)
2 Protect profits while continuing to stay in the trade.

Strategy

Trailing stop loss that is not activated until price reached by average price
Once stopped out. Place new order below stopped out price and reset new stop.

My thinking is that it should keep me in the trade and protect most of the profit without letting small movements in the price close the trade entirely.

Variables would probably be:

Stop loss Pips behind current average price
New Entry position once stopped out from Stopped position (Pips)
Number of repeat times to use the Stop / Reorder

If you have a similar strategy for sale of know of a free one or can see major flaws in my thinking I would appreciate the feedback.

[NinjaTrader_RyanM1]

Hi brianoliver,

Hopefully you will get some feedback from other community members here. If you are looking to get your strategy professionally developed, you can always consider hiring one of our 3rd party NinjaScript consultants. A list is available here:

http://www.ninjatrader.com/partners#NinjaScript-Consultants

The main thing to keep in mind when describing your strategy is that the ruleset and strategy operations must be completely objective /mechanical. To get a feel for how these expressions are made you could check out our strategy wizard condition builder. This interface requires no programming and can be helpful for seeing exactly how to express things in an objective ruleset - > action format. More information on this is available here:

http://www.ninjatrader.com/support/helpGuides/nt7/condition_builder.htm

[brianoliver]

Thanks for the link, I was sort of hoping the some of the other members - professionally or otherwise would already have developed a similar strategy ( I don't think I am an original thinker) , and have one available.

If I cannot get one that has already been created then I will look for a programming partner, or post the job on one of the programming sites.

I don't think it will be very had to program its just that I don't want to spend the time learning the syntax just now., and would rather pay for it.

[borland]

This is a tough problem to solve. For momentum trading, you want to let your profits run and cut your losses short. If you use a trailing stops, your giving back unrealized gains on the expectation that the trend has reversed.

But a trend reversal may not be that easy to identify early enough. Or it may be misjudged, in which case, it just turns out to be a pullback for a run back to previous levels or greater. If your system exited a trade with a trailing stop, it might be re-entering at a less favorable price than the previous trailing stop exit.

With my momentum trading system, after entering a position (in a 'bull' market), if it sees a weakening of the trend (or breakout failure), it starts looking for an exit on the next minor rally attempt. Sometimes those minor rallys don't materialize, or aren't strong enough to find an exit, resulting in giving back unrealized gains, and suggesting that a trailing stop might have been a better strategy. But, if the trend strength comes back before it finds the ideal exit, then it will stop looking for exit.

In similar market conditions, but with a 'bear' market, my trading system uses rules for an immediate exit based on price (relative to a moving average), stochastics, and RSI. It's more conservative then, so it sometimes misses moves and exits too early.

I've just come to expect some giving back of unrealized gains as a normal part of trading. I've always got the stop based on the entry price as portfolio protection.

Good luck finding a solution.

[brianoliver]

Thanks for your thoughts.
My thinking was to have a trailing stop and when taken out to enter a new position at or above (in a long) or below ( in a short) the highest high or lowest low that the stock had traded at while I was in the trade.

I realise that I would be giving up some gain but it should keep us in the trade without the need to continually be watching the trade and should capture most of the gain. (We live in hope)