Reading through this thread again, a thought has occured to me. Most people at some time or another (me included) are good at getting into the right trade at about the right time, but have difficulty staying in the trade and not being shaken out. I'm sure everyone has or has had this problem. I've sat down this morning and started to look for ways to stick in a trade better until the correct time to exit. Now obviously this has advantages and disadvantages. The disadvantages being that there then becomes a danger of sticking in a trade you should be exiting asap, so a filtering system is required, and it too will never have a 100% accuracy but may well help those that would be profitable if only they stayed in longer and didn't get shaken out because of the fear of loss factor. It's just a thought that may help a bit. Best Natalie
Another thought. If just 20 people stopped getting shaken out, then it would continue down (or up atcmb.) 20 ticks sooner? Best Natalie Might only be visible on a tick chart though...
Natalie, That's part of the problem...many traders that have good entries but unable to follow along the move... (wiggle stops them out for small profits) are already using some sort'uv filter system based on their definition of such. This is what I think...too many traders go into the market thinking they are going to catch every or most of the big moves... unrealistic high expectations. Sports Analogy: Swinging for a home run or triple at every good pitch. Another different situation with the same result problem...I know a trader that uses fixed profit-targets...exiting everytime at +2 points if/when he gets it... Yet...he always complains about missing the big trends... hello...using fix targets will leave you at the station standing alone EVERYTIME if your discipline enough to apply such a rigid system. Thus...these traders should never complain about missing the big move because their system is not designed to catch such moves. For traders that aren't using fixed profit-targets... a more realistic goal is to try to hit singles...get on base... every once in awhile...you'll tag a home run. My personal goal for each month as a trader that doesn't use fixed profit-targets is to catch only one home run trade... for me that's anything near or more than a +10 point move in the Eminis on at least 1 contract. Once again...I don't think the key is a filter system because many traders are already using such via things like adding another indicator, adding another time frame et cetera... the key is trade management in the exit strategy. That key can be different to any trader. For me...that key is position size management. I have several profit-targets for each group of contracts in a trade...the first group of contracts are design to bank profits and to protect the remainder as it attempts to catch a home run... more often than not...the remainder gets stopped out at 1 tick better than entry price to cover commissions while I still bank profits on the first contracts. Simply...that remainder is getting on base but once in awhile... it nails a home run. Note: I recommend all new traders or struggling traders trade 1 contract or the minimum shares...then upon exit of the real trade... use a realtime simulator to pretend they still have a remainder in the position and try to manage that remainder to build up confidence and experience to trade size... until their trading account has grown large enough to keep the same risk parameters when they are able to trade size. This is not a one size fit all solution. However...if your trade methodology seems suited for such to be integrated into... along with having discipline...it may merit further research and application. P.S. Another possible solution is for traders to have a Re-Entry Method if such signals appear in either price pullbacks (looking for Long position signals) after an uptrend or in counter-thrusts (looking for Short position signals) after a downtrend... instead of getting emotional, pssst off that can cause missing those re-entry signals. This thread started via the big downtrend on July 16th Wednesday...there were several failed counter-thrusts in that big downtrend before it found support around 1115am est. NihabaAshi
NihabaAshi I use significant levels, S/R and pivots etc to do a similar sort of thing, but not in quite the same way you do. I'm going to look more at it and see if I can improve my results with that idea. Thanks Natalie
Amen. But I don't think new traders should be trading the eminis. Trading happens too quickly there for the young trading mind to learn effectively. Surely some will succeed but usually at a substantial cost. However, trading 100 shares is perfect. Stick to your plan and you can trade a long time on $5K. No you can't make a living trading 100 shares, or 1 contract. But you can learn how to trade for a smaller price than many people do.
Shorted SNDK at 9:44 when it broke down through the previous close. Mental stop was a bit higher than the high of the previous 3-minute bar. Just like yesterday, when I was in the money I panicked when the price started to come back up and my P/L was shrinking. Covered for a measly .18 profit. What happened next? Look at your charts - the sucker tanked almost TWO POINTS! Not only that, I'm not pulling the trigger on umpteen trades that, by this estimate, have resulted in leaving at least 3 more points on the table. I'll do the research, even have alerts go off that I've set, yet when the time comes I back off. I'm relatively new to trading and I know I shouldn't be beating myself up, that it's a matter of time and confidence from seeing one's strategies working, but holy cow, this is crazy. My strategies are working beautifully, with an amazingly high amount of set-ups that meet my criteria, yet I'm hesitant to pull the trigger and, when I do, I exit much too soon in violation of my strategy to begin with. I have to get it fixed in my head that a strategy and stops exist for a reason!!
Think about the skill/technique, not the money. Don't let fear and greed control your actions. Trade smaller size so the money will be relatively insignificant. Then you will be able to concentrate on the trading technique without having fear and greed get in your way. The market's gonna do what the market's gonna do. Just go along for the ride and at the same time do what you have to do to minimize your losses. Preservation of capital is what it's all about. gotta_trade
Alot of problems like this are psychological in nature, but there's alot you can do to minimize the likelihood they occur. Most importantly, you must trade with confidence, without second guessing or looking back at what could have been, and in order to do that you need to develop a hard system for taking losses and profits. Research and record your setups and try to find the optimal area to set or adjust your stops. You must be able to trade with the attitude that, even if you get stopped out before a move which would have been extremely profitable, you can shrug it off and wait for the next signal. Patience, confidence, and persistence can only come from months and months of research and experience, so don't get discouraged early on. Another tip: take that P/L ticker off the screen
Yes - It is such a huge distraction and completely obliterates rational thinking about the strategy or technique, and gets very scary indeed when there is larger size than one is necessarily used to... Best Natalie
Definitely not eMini's for beginners! I mean at, what? 1,250 times the tick size of stocks??? I would argue with that 100-lot recommendation. With penny-per share pricing as we can get it nowadays, there is no reason whatsoever not to trade 10-lots over small order execution. Once you're getting the hang, you can gradually increase to 20, 50, 100 + shares per position. I see no better and safer way to learn real trading. 5 Years ago, we didn't have this privilege. Appreciate it - Learn small and then deal big! Most ppl do it the other way - Deal big first and then learn small (from what's left). Do this succesfully for a couple of years, and then consider to have a glimpse at futures. For now, don't even think about it. Trading Rule #1: Protect your capital at all costs. Good Luck to You my Trading Brother, ~The Scientist