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Old Mar 13th, 2012, 11:18 PM   #1
ziyan
 
 
Join Date: Jun 2011
Location: United States
Posts: 15
Hi all,
I'm still a novice trader. The market has been very good to me for the most part, but I keep getting shaken out of highly profitable trades prematurely (2nd straight time this month). I use discretionary stops based on daily profit loss percentages to around 2.5% (?which is substantial?)
Here's my most recent trade:
SZYM BOT on 3/7 @ 11.88 (knife-catching? crap, I know. sorry guys! Thought I saw good support from previous periods)
3/12: Gap up @14.18, breaks 14,
breaks 13.90,
breaks 13.80, I type in my order,
breaks 13.75, I brace myself,
breaks 13.70, I vomit. and hit the sell.
SOLD @ 13.65
4:00 pm closes over 13.90. I curse the world.
Today. Closes over 14.43. I am too chickenshit to get back in saddle. (trading on cash acct w/3-day settling) and I curse the world some more.

Now part of me pats myself on the back for making a profitable (albeit riskily initiated) trade. The other part kicks me for being a slight wuss in a bull market and not using wider stops. And of course, I always kick myself for trying to catch the falling knife so often.
Can I please get some feedback on this trade?
Any & all constructive criticism appreciated.
Thanks so much!
    Quote
Old Mar 13th, 2012, 11:48 PM   #2
jo0477
 
 
Join Date: Aug 2010
Location: Vancouver, Canada
Posts: 229
Quote:
Quote from ziyan:

Hi all,
I'm still a novice trader. The market has been very good to me for the most part, but I keep getting shaken out of highly profitable trades prematurely (2nd straight time this month). I use discretionary stops based on daily profit loss percentages to around 2.5% (?which is substantial?)
Here's my most recent trade:
SZYM BOT on 3/7 @ 11.88 (knife-catching? crap, I know. sorry guys! Thought I saw good support from previous periods)
3/12: Gap up @14.18, breaks 14,
breaks 13.90,
breaks 13.80, I type in my order,
breaks 13.75, I brace myself,
breaks 13.70, I vomit. and hit the sell.
SOLD @ 13.65
4:00 pm closes over 13.90. I curse the world.
Today. Closes over 14.43. I am too chickenshit to get back in saddle. (trading on cash acct w/3-day settling) and I curse the world some more.

Now part of me pats myself on the back for making a profitable (albeit riskily initiated) trade. The other part kicks me for being a slight wuss in a bull market and not using wider stops. And of course, I always kick myself for trying to catch the falling knife so often.
Can I please get some feedback on this trade?
Any & all constructive criticism appreciated.
Thanks so much!
I'm far from an expert, but my solution to avoid picking tops/bottoms was to start entering the majority of my trades on stops instead of limits. I mainly trade 6E and sometimes NQ in the evenings (6E mostly for liquidity purposes) and I had quite a bit of success initially trying to squeeze as many ticks as possible out of every trade. Then, things went south for awhile when the volatility really deteriorated and I found - same as you - that I was getting shaken out of good opportunities and getting shredded in the chop.

Now I'm ok giving up those few ticks to try and confirm I'm in the right direction (whether entering on a pullback or grabbing a reversal). If price doesn't move the way I anticipated, I generally don't get filled and I look for another setup. Figured since my stops get run all the time anyway, why not just enter on them and profit when everyone else's get run instead of the other way around

Just my 0.02 and good luck out there!
    Quote
Old Mar 14th, 2012, 12:04 AM   #3
Shanb
 
 
Join Date: Jun 2011
Posts: 1,107
Quote:
Quote from ziyan:

Hi all,
I'm still a novice trader. The market has been very good to me for the most part, but I keep getting shaken out of highly profitable trades prematurely (2nd straight time this month). I use discretionary stops based on daily profit loss percentages to around 2.5% (?which is substantial?)
Here's my most recent trade:
SZYM BOT on 3/7 @ 11.88 (knife-catching? crap, I know. sorry guys! Thought I saw good support from previous periods)
3/12: Gap up @14.18, breaks 14,
breaks 13.90,
breaks 13.80, I type in my order,
breaks 13.75, I brace myself,
breaks 13.70, I vomit. and hit the sell.
SOLD @ 13.65
4:00 pm closes over 13.90. I curse the world.
Today. Closes over 14.43. I am too chickenshit to get back in saddle. (trading on cash acct w/3-day settling) and I curse the world some more.

Now part of me pats myself on the back for making a profitable (albeit riskily initiated) trade. The other part kicks me for being a slight wuss in a bull market and not using wider stops. And of course, I always kick myself for trying to catch the falling knife so often.
Can I please get some feedback on this trade?
Any & all constructive criticism appreciated.
Thanks so much!
Now I think you need to be clear about your holding period on this trade. If you are holding this for a position trade to take out 15 you shouldn't be shaken out of a small correction like that. However if you are looking for short swing trade you need to be scaling out into that move lol. That thing moved up more than 25% from you entry and had gapped up close to 10% that day.

Regardless you need to more specific with what the objective of this trade was? What type of move were you looking for? What was your target? You can't just throw on a trade and hope for the best, your emotions will get the best of you and you'll make mistakes.
    Quote
Old Mar 14th, 2012, 08:56 AM   #4
Arnie
 
 
Join Date: Feb 2003
Posts: 3,980
I think your stops are too tight. Google "Maximum Adverse Excursion". Use that method as a starting point to set your stops.

http://www.traderszone.com/trading-b...n-sweeney.html

http://www.earnforex.com/forex-e-boo...us_Traders.pdf

http://www.fibonaccitrader.com/journals/FTJ8.pdf
    Quote
Old Mar 14th, 2012, 10:20 AM   #5
oldtime
 
 
Join Date: Jun 2011
Posts: 7,479
Quote:
Quote from ziyan:

Hi all,
I'm still a novice trader. The market has been very good to me for the most part, but I keep getting shaken out of highly profitable trades prematurely (2nd straight time this month). I use discretionary stops based on daily profit loss percentages to around 2.5% (?which is substantial?)
Here's my most recent trade:
SZYM BOT on 3/7 @ 11.88 (knife-catching? crap, I know. sorry guys! Thought I saw good support from previous periods)
3/12: Gap up @14.18, breaks 14,
breaks 13.90,
breaks 13.80, I type in my order,
breaks 13.75, I brace myself,
breaks 13.70, I vomit. and hit the sell.
SOLD @ 13.65
4:00 pm closes over 13.90. I curse the world.
Today. Closes over 14.43. I am too chickenshit to get back in saddle. (trading on cash acct w/3-day settling) and I curse the world some more.

Now part of me pats myself on the back for making a profitable (albeit riskily initiated) trade. The other part kicks me for being a slight wuss in a bull market and not using wider stops. And of course, I always kick myself for trying to catch the falling knife so often.
Can I please get some feedback on this trade?
Any & all constructive criticism appreciated.
Thanks so much!
this is going to happen to you for the rest of your life until you incorporate a sound money management program which is not based on market price.

A good system will usually give back 30% of any move. So,when you look at your highwater mark, don't forget to minus out the 30% you should give back.

nothing wrong with catching falling knifes, nothing wrong with closing out early, and really, nothing wrong with closing out late.

put it all in context of your money management system, then, what you are now devoting 100% of your mental energy to will only require 10% of your brainpower.

you already have a good starting point. You know your money management system needs to avoid PDT.

If possible, take some time off and do some testing using random entries. Once you get a random system that will break even minus the spread and commissions you are ready to go live.

good luck
    Quote
Old Mar 15th, 2012, 10:17 PM   #6
ziyan
 
 
Join Date: Jun 2011
Location: United States
Posts: 15
Thanks everybody for the insightful replies.
I'm gonna look into the buy-stop orders, maximum adverse excursion, and for sure the trade targets, money management, and being real about my trade objectives.

For runaway trades like this, does anyone have an opinion on whether it's better to have wide stops from the onset or simply to jump back in after a shakeout if conditions are favorable?
Simply put, this year has been ridiculous so far in terms of bullish sentiment & chances are, in another environment, that drawdown could have been steeper.

Oh, and what are the mechanics behind entering long trades with a stop? Did not know that was possible?..

Again, I'm very grateful for the replies I've gotten. Thanks so much!
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