A channel trade on CL just now. Shorted .40, profit .22. Short based on bear flag (blue channel), nice volume confirmation. Target based on prior support and red trend line. Showing this because of the channel--it's a bear flag, and it failed to reach the top... indicated weakness, therefore IMO a high probability short. http://www.elitetrader.com/vb/showthread.php?s=&postid=3240883#post3240883
This is the part I have found most difficult to figure out in learning Price Action trading. It seems to me the trade management part is critical in order for the Price Action system to be profitable, and yet there is little discussion about it. I've just been trying to figure it out in simulated trading, and developing some rules for myself as I go along. I'm trading CL now, but I wonder if trade management differs depending on what one is trading?
Bik, I started studying and trading PA about 2 years ago; my primary focus has been on ES. I am now trading CL in SIM mode. Since my best setups are different instrument to instrument, the trade management rules differ as well. You are spot on. Wolf
wrb, Some excellent thoughts here. Thanks! Could you share any thoughts you could around some of the best methods to manage emotions during trading? The only thing I have found to work is just plain old "time in the saddle"(screen time) that seems to build my confidence in my setups. After enough success, my emotions (mostly fear of losing)subside to the point I can follow my plan most of the time. I sure would like to shortcut my many months of testing my setups in SIM if I could. Thoughts? Thanks again, Wolf
in order to manage thoughts one should do the same dumb things over and over and over againg...and over again panic appears where you don`t know what the hell you are doing.
Lets put it this way, if/when you switch trade instruments...you may first try to use the exact same trade management rules but you'll quickly adapt it to the new trade instrument although you'll most likely continue using basic principles of your original trade management. Also, I highly recommend you backtest your trade management rules on a simulator whenver switching to a new trade instrument prior to going live with real money on the line. I don't think your ability or lack of ability to control/manage your thoughts and emotions has any impact on your backtest results of your trade setups while simulator trading. Therefore, if you want to learn what thoughts and emotions you're going to have along with how to manage them...such can only be done when real money is on the line. That's why I'm a strong believer that backtesting or simulator trading should only be done to learn your broker platform so that you can efficiently use it and to develop a trading plan. Simply, as soon as such tasks have been completed...it's time to go to real money trading via the minimum position size. It's during real money trading where you will learn on your own how you interact with the markets as a discretionary trader...good or bad. Hopefully you'll find and reuse whatever you have in your personal life that got you through those situations you have/had in your personal life. As for myself, it took me about 5 years as a trader before I felt like I had control and able to manage how I interacted with the markets. It took me that long to realize how to use the experiences from my personal life as building blocks for me as a trader. That's the journey of a discretionary trader (someone that doesn't use automation system). It requires a ton of screen time within many different types of trading conditions...trading conditions that will expose your weakness and strengths in your persona. Yet, if you stumble and you think you've exhausted all the self-help mumbo jumbo, that's when you go find a psychologist to help you determine if the problem is you and how to resolve the conflict. Lets put it this way, most top athletes have a psychologist and I'm not talking about the bad boys that were order by a court to go to anger management classes. Mark
Thanks Mark! Probably need to begin the weaning process from my SIM real soon. I have a consistent edge in SIM and am most likely delaying what sounds like the biggest part of my learning curve. Wolf
mark: you are so right. i do have human emotions. to say that there is no mind, no thought, no nothing-except reaction in trading.... as you pointed out--is perhaps really misleading to many.... what i meant in what i said is.... a successful trader will not allow himself/herself to be concerned with anything else other than watching for his/her trade setups, executing according to the trading plans, the stats and the strategies accordingly.... any other additional thoughts or emotions or extra time to draw some more lines or whatever....; would be a distraction which as you elude to, would interfere with trading execution.... mark, just where do you get the idea that a successful trader must trade every day or trade full time....? a person who works for others will almost have to report for work every day and that is a given, agree? for most traders, they are their own bosses answering to no one, absolutely no one.... except their lovely wives and demanding children.... honestly, mark.... the best i could manage is trading 4 days a week for more years than i care to recall.... and many a day, i only traded for one or two hours, avoiding the opening and closing periods whence brokers are trying to fill their back orders.... just as soon as i finish my trading days, whenever i can, i just jump right back into bed.... i do not post my trading activity to convince someone or anyone.... mostly the charts or summaries are there to encourage other aspiring traders to be that.... if you have the will, the time, the determination and some unencumbered funds of middle four figure et al.... you could learn to trade.... and perhaps become a successful and profitable trader.... within a year or two.... depending on the person's persistence and determination.... and how quickly he/she can settle down to focus on only one product and one productive trading pattern.... (to start out.... with some degree of confidence....) mark, you know every trader has losing trades and losing days.... but mine is very different, i believe, my worse loss when it ever occurs, is confined to 9 tics, my other professional friends could effectively delimit their stoploss to 4 or 5 tics which is at this moment in time is definitely beyond my scope and ability. LOL it will take lots and lots of further fine tuning get to that next level.... i am quite happy where i am.... for the time being any way.... wishing you fun and success in multiply dosage.... as well....
Yeah...that comment I made was in reference to full-time day traders. Thus, it wasn't aimed at swing traders or position traders that obviously don't trade every day. In addition, it wasn't aimed at successful traders that have another gig. I myself intentionally don't trade 2 - 5 trading days per month. I need that to re-energize and to get in additional family time...more fun stuff. Yet, when I was single and no family (many years ago), I didn't need to take days off to re-energize. Mark