Awash The first trade of the three is the only one that makes sense to me. It just didnt work out. The other two I see no reason to take. Divergence on a short time frame is very iffy, imo.
Scalp! I don't remember mentioning at once in my journal that my strategy is to scalp price. I've never scalped price nor do I plan to do this in the future. However, I realize some of you have concluded that I'm a scalper solely upon my quick profit trades. My quick profit trades are a result of closing positions early and my inability to properly management them. Just recently I posted my most frequent errors along with ways I can resolve these issues. However, I didn't discuss in detail my rationale for exiting prematurely and entering late. I will attempt to explain my problem hoping to solicit more constructive criticism and/or hold myself accountable. Premature Exits: two issues cause me to exit prematurely. 1. I focus too heavily on the bid/ask, constantly monitoring tick by tick how much I'm up or down instead of focusing on my chart pattern. Every time I watch price tick by tick, I'm either getting happy it's going my way or fearful when it's not. In addition, I'm inevitably becoming uncertain and I'm failing to read what my charts are actually saying. 2. Predetermined profit targets! I fail to set predetermined profit targets on each trade which inevitably leads to more uncertainty and a premature exit because I don't know when to exit. 70% of the time I don't set a predetermined profit target (poor trade management). Late Entries: Late entries and chasing price kills me! I generally enter late because I'm always telling myself to wait on another candle for confirmation and/or my overall confidence about the pattern maybe poor. In short, Late entries and early exits plague my trading and they ultimately lead to poor trade management. This is precisely why you see my trades P/L section at plus or minus .25, not to mention why some of you have concluded I'm a scalper. I can bring a quick resolution to these errors by: a. minimizing my bid/ask screen and focusing on my charts more! b. Set predetermined profit targets on each trade! c. When the signal appears, enter immediately! (this problem is easier said then done) From this point on, I will post my initial stop and initial profit target on all my trades, and I will comment on them. Also, from this point on don't refer to me as a SCALPER! Lastly, all feedback is welcomed!
A rule I recently added that has helped very much is this: When one of my trades is a loser, I don't take that side for the rest of the day. Since I trade S/R, this means that if like today when resistance is taken out early, I will just look for longs the rest of the day. Vice versa for shorts. I think when one of your divergences is taken out, it may be a sign that institutional money is coming in (or heading out).
Had the same problem for a while................ (a.) looks like a needed part of the solution... (b.) can be deadly if indications are the market isn't going to reach your target but you hold on because that is your target . Its a place to start, but be careful unless you are accustomed to holding for long periods. Personally, I'm not. (c.) sounds like you don't trust your indicators. Have you back tested them?? I tried all manner of indicators but nothing worked for me but volume. As in an earlier post, volume tells a lot.
Peterfigliozzi, Good insight about the institutional money coming in (or heading out)! Iâll ponder your statement about the rule you recently added. That seems to be tough â¦â¦â¦.but I will comment later after further analysis. Thanks for continuing to post and provide valuable insight as its been incredibly helpful.
cdbern, I see what you are saying here, how did you overcome this problem I find myself that it is too easy to try to talk yourself out of a trade if you think that the market "looks weak" therefore I am working torwards finding a good profit target to look for on every trade, however it is frustrating to miss this by a tick, so therefore I try to trail reasonably tight stops to insure I do not lose on a once profitable trade by missing just the tick I was looking for. Awash how do you plan to do deal with this ?