Jax, Have you figured out why you give the money back? Do you feel confident once you have a win under your belt and start taking greater risks? Do you hang on to losers longer than you should because you don't want to give back any of your winnings (i.e., I'll get out when I'm even...) and end up giving them all back? Or is it simply the time of day -- you win in the morning and then lose in the afternoon? I think it's important to understand why those subsequent trades go wrong. For example, maybe your edge is valid in the morning market, but isn't so reliable in the afternoon -- don't trade the afternoon market. Or it could be that you get sloppy, which you can try to address by being aware of the behavior and not indulging it. If you don't already do so, try keeping a trade journal. If you keep good notes, it should become evident pretty quickly where the problem lies. Good luck. Regards,
======== Jax Russel; Candle trader got it right also, have to book profits more often; if you add commissions, exchange$, you are willing to give up 1 point[or keep about $500 out of 7oo, or keep about 70%]. Could name it 71 % after FutTrader71. Not only do I have something like that written in my plan /checklist;I like to repeat that out LOUD , especially if i miss it from time to time.Repeat that out loud. Some may use PSAR in a mechanical way strictly , I dont, however; its an excellent indicator as a principal. Wisdom is profitable to direct. So keep a Parabolic Stop & Reverse on my charts [psar], as ANOTHER reminder of what we have written & said about tightening /trailing stops PSAR s-l-o-w-l-y tightens up as futures trend up or downtrend, on your candle charts..
FT71 said it best. I might add that you consider focusing on points rather then money (assuming you trade index futures). Also, you may benefit from a post I made on a related topic. http://www.elitetrader.com/vb/showthread.php?s=&postid=1004049#post1004049
I also don't understand the logic, though the attitude is understandable. The attitude is, of course, incorrect because it's based on a (potentially) incorrect assumption. For instance, take the case of a person who goes gambling in a casino. They know that the house has the edge, hence the natural feeling for many is "quit while you're ahead". You got something by luck, and now keep it before the lucky streak runs out. This probably goes back to deep caveman psychology of humans. If "getting lucky" means finding a great herd of plump animals which are lovely for dinner---trying to catch four of them but with the chance that they all get away is worse than trying to catch just one and keeping it and bringing its meat back to the village. This is to promote human survival: minimum number of calories and nutrients per day. Eat too much, and you get fat and slow. In trading it's probably a poor idea. The fact that many people feel this way naturally, however, probably provides market structure that gives good traders a potential edge. I believe that the feeling of "getting out now while you're ahead" is precisely what gives trends. Everybody has a different entry point and tolerance, so this makes for a smooth exit and change of hands to the other human psychological need, envy of those who already got something, "got to get in now". Back to trading and gambling. Consider card counters in blackjack. They, and those who game roulette with physics-based computers, are the only positive-edge casino gamblers. They spend hours "noise gambling", waiting until the count is sufficiently good to be worth it, and then hugely amplify their bets and play it to the max as long as the counts are good. A large fraction of profits may be made on a small number of hands---or trades. This goes against the human psychological need for continuous positive (but modest) reinforcement, which is arbitrarily getting out early when "I'm up a bit". This is probably what gives people with different make-ups an edge. If you have a positive edge then you ought to trade as long as the conditions are in place, regardless of your previous results---unless you have shown that those previous results are statistically predictive. If you don't have an edge---don't trade.