recently I found I over-stayed positions pretty frequently. my trades most are overnight. I often did not take profit at the best. when th emarket gave me a decent profit, often I become greedy and ask more, then a pullback, that made me feel like an idiot. aim for 10 birds, 9 is there, wait for the last one, then just 8, just 7, ..., just 5, feel painful, finally take 5 birds. after I toke 5 birds, the last pullback is over, shoot/drop hard more than I expect.
What I do is I decide in advance whether I want to shoot for a hard target or a flexible target. If a hard target, then the take-profit order is placed and I accept it. If a flexible target, then I usually have a level of favorable move at which I will move my stop to break even, and then watch price react as it approaches each minor S/R level in line. Taking smaller profits in the middle messes with my R:R so I try not to do that except for when I stop-and-reverse based on a new signal. It's not important to capture every possible tick of a move because we can't predict what will happen. It's best to have a plan that produces favorable odds, then trade that plan as perfectly as possible. Otherwise emotions are involved.
Every trade is based on technical, no gray area there. Ok, the trade gets filled, best case the profit target gets tagged so the trade is booked, worst case the trade races to stop out and you book it and move on to next trade. (that assumes you have rather tight stops based on sound technical assumptions). A regular trade that turns into a S.A.R. trade must be an emotional trade because no reversal signal should be allowed to come between a profit target and a stop target. Being a confirmed lousy trader in CL compared to ES, I must therefore conclude a crack CL trader like Donna has a gift to shift tactics when the battle calls for such action based on her intuition. Now, in ES where the action is more reserved and orderly there should never be a trade that gets turned into a S.A.R. because there would never be a signal between the original profit/stop targets. In CL emotional trading might just be de-rigueur, ha. In my mind, every trade is flexible relative to target only. I tried thinking a stop loss of 12 ticks in ES was going to work better than 8 or less but found I simply CAN NOT allow more than 8 ticks get hit so changed back to 8 max. The rational is easy, a stop of 8 ticks or less is meaningless even if 3 in a row because that deep of a hole CAN BE overcome every time. BUT, to overcome 3 losses of 12 ticks each is to much for mere mortals. (it is a fantasy to imagine reversing back to profit when you dug the loss hole far to deep, Jodi Arias might talk her way back to life but traders can not). Agree with try to hold every trade to target, and indeed if hit, rather than looking for a reversal just think continuation and reenter the trade.......on retraces......think add-on. PS: trader 198, RETRACES are normal and EXPECTED once you learn how to read a trend. Retraces are actually your friend and you will learn to WANT them. Learn how to use "HOOKS" to reenter after the countertrend traders run out of ammo and courage to fight a losing battle and price continues in previous trend direction. "always trade reality, not fantasy, if you want fantasy, get married"
I owe you an apology. I've been giving too much credit to Brooks for what I learned about trading, when in fact you'd already planted all the right seeds by the time you recommended his book to me. "Think continuation" is my mantra in a trending move. That is the most valuable thing I ever learned and you tried for about a year and a half to drill that into my counter-trend head. P.S. The only time I do a S.A.R. trade is when I'm positioned for more continuation and there's early counter-trend setup off a very key S/R level where a deeper retrace is now likely. P.S.S. Remember the photos of spiders' webs under the influence of various substances? ES is like the drug-free spider web; CL is like the web of the spider on caffeine. http://www.trinity.edu/jdunn/spiderdrugs.htm
Let me guess you have one of those net expectation = 0 minus fees. if you take profit quick you'll be back here whining about missed trades, but NOT about how your losses are now greater than your profit.
What I don't quite grasp yet is what time frame to use to determine the direction of the trend. I want to trade in the direction of the trend because that's where the power is. I trade using the 1 min chart exclusively. I have tried trading off the 5 min chart, but my capital is quite limited, and I find the 1 min chart is allows me to manage my capital better. But my confusion is whether I use the 1 min chart to determine the direction of the trend, or do I use, say, the 5 min chart to determine the direction of the trend? Say, for example, price was in a down trend on the 1 min. Then reverses, and puts in a higher high in the other direction. Is this now an uptrend? Do I play it as an up trend? Because more than likely, the 5 min is still in a down trend, and the direction of the trend is probably still down according to the higher 5 min time frame. Can you help me understand this?
My personal experience is that the odds are most favorable when you trade in the direction of the trend in your chosen trading time frame, and use a higher time frame for gauging "airspace opportunity" on counter-trend setups and for targeting profit-taking zones. Using a 1-min chart exclusively is some of the most difficult trading to master. Bob Volman is a must-read resource on micro-scalping using a small time frame such as 1-min. (He uses 70-tick chart for Forex, which is similar to a 1-min chart during active session hours for most futures). If the 5-min price action indicates a well-defined down trend, the best odds will be with-trend entries off of 1-min pullbacks. It's important to master the nuances of where and how to enter during the pullback phase, otherwise you can get chopped a bit and significantly reduce your profits. Volman's book covers several positive expectancy setups for doing this, and he's quite adamant about risk control and patience. You're describing what I see as a 1-2-3 setup in the 1-min time frame that indicates a deeper pullback is now in play. When this happens, it means price broke the high of a previous 5-min price bar (in the down trending leg) and is now more likely than not to continue the pullback to a key resistance level in the 5-min time frame, often to the falling 5-min 20EMA or the descending overhead trend line. If your trading plan includes counter-trend trades, this can be a reasonable setup to trade as long as there's enough "airspace" from entry price to the 5-min resistance level out of which you can scalp a profit equal to, or greater than, the distance from entry price to a technically survivable stop loss (in this case, the previous new low in the trend).
Thanks for your answer. I didn't know 1 min chart was the hardest time frame. I am still practicing using simulation at night, and paper trading during the day. It doesn't seem anymore difficult than trading on a 5 min. However, I only shoot for 1 point on the ES. If I can get two set-ups a day (2 pts), then I can support myself. I live modestly. I am not sure I grasp the second paragraph you wrote. We determined that it is best to use the time frame you are trading (in my case, the 1 min) to determine the direction of trend. If the 1 min has been in a down trend, and then turns around and makes a higher high, we are now in an uptrend, per the 1 min chart. Are you saying, if price on the 1 min chart, after a down trend, makes a HH, then more than likely price on the 5 min chart, also in a down trend, has broken above the previous down trend candle? If so, the price action on the 5 min chart has now entered a pullback or counter trade (aka retracement) right? So while the 1 min chart might be in a new uptrend (per the HH), the 5 min chart is still only in a counter trade, mode, and as such the new uptrend on the 1 min chart has limited power? Oy so hard to explain this stuff. Sorry if it is convoluted. Thank you.
Thanks for your answer. I replied to your answer, but I just checked a couple of hours later, and my reply did not apparently show up in the thread. So I will try to rewrite my reply later.