Hey @volpri thank you for the in-depth meaningful commentry. I will try and respond the best I can as kids are on summer break and there's a bunch going on at the same time As we had spoken about inertia, I feel that the sentiment for inertia can be so strong, that it takes a while for anything meaningful to materialize. The reason for it's strength is purely because moves require strong conviction with deep pockets to exercise their intention. Anything less than that, would force one into lower categories. That is where HFT and algorithmic trading comes in and they are in for smaller profits, while working on the best volume available to them. However, in the face of bigger, longer term players, they will fail 70-80% of the time. That fail rate is increased by the opposite side of HFT/algo programs, as they start utilizing and manipulating situations presented to them by higher players and bump that fail rate to 80-90%. In short, most first moves will be opposed, have a short lasting, weaker momentum, unclean trajectory etc. until previous prices have been tested. @NoDoji was a very strong propagator of "the second mouse gets the cheese". The wisdom in this is to allow the noise to be consumed and trapping early entrants, all the while retaining ones valuable mental, emotional and physical equity for the next phase, which most times is when the payout comes in. I will get more into this when I get some time on my hands. The entry here is executed purely based on your strategy and rules, which over an x number of trades has probably shown you that it works. The advantage here is that you leave very little to your emotion, all the way executing like a tried and tested algo. This is great as it increases your odds and with the lack of emotional strain, the stress level is low. The disadvantage is that the R:R ratio is getting very skewed for a discretionary trader. If I am correct (as mentioned in your post), you are aiming for 3 points max, while your risk is 4.5 points right?. If that is the case, then you are highly depending on your win rate being higher and having entries that are high probability. Should you include a good R:R entry into your system, I think it would very positively benefit you, as you could get you R:R to 1:4/1:5 at worst and at over 1:10 a decent number of times during the day. There is a whole different system to that and hopefully I can get into that later sometime during the week, if you're interested. My apologies for being brief and incomplete, as well as, for some things not being explained better. There is just so much information to relay and I'm constrained for time. I hope to elaborate a little better next time. Hope you enjoy your day
I will answer back this post as I get time. I am still in the middle of remodeling house and we all know "wife cracks the whip and hubby makes the trip!"
In my humble opinion, your metric of actual risk is completely meaningless. Its like getting it on with a prostitute, no condom, full well knowing that you might catch a disease, but then when you get your tests back, you find out you haven't caught anything. You claim victory that your actual risk was in fact nil. But how does this help you for your next encounter? Will you really take the huge risk again just because the outcome from the last time was favorable? What is the point of saying actual risk after the fact when before you do your testing, the risk is very real? Continuing with analogies, its like saying you didn't need fire insurance after a fire tore through your neighborhood but the flames skipped your house. The outcome for any of these scenarios doesn't have any bearing on the initial risk. The risk is always there before the event, and just because luck was on your side, it doesn't mean the actual risk was zero. The risk was always there, you just got lucky with the outcome. Back to trading, if you're really going to use a stop that is so far away, and you will stick to it and not get out just cause it isn't moving your way initially, then you're operating with a R:R ratio that is highly skewed towards risk and you need a really high win rate. There is simply no way around this. Sometimes your 6 point stop will hit. If you don't hold for you full risk, then all you're really saying is that the stoploss is just a disaster stop, but that you don't really intend to ever let it hit, but this is a totally different thing all together now. You're presenting this just as ideas though as you state, and not even real trades, so not much point in arguing about this, but for any newbies reading, its very important to point out that if this does work for you, its not anything that someone should be trying to replicate. If you want to be of service to the ET community, you should show examples where your actual risk was in fact the full stop that you had to take, because I'm sure it happens. Risking 6 points to make 2, maybe even less, is a strategy that most will not be able to capitalize on, nor should they even try.
Apparently you just do not understand AT All the concepts I am expressing in my illustrations. I am not going to debate this with you. But just try to understand that you may place a stoploss 6 points away or 2 points away. But no one has any idea if their SL will be hit or not. It is only after the market moves that one can tell what their actual risk was as compared to their initial risk. When i see that actual risk i adjust my profit target according. I don't see why that concept is so hard to understand. I was not trying to trade today nor was I claiming any victories. I was just using todays live price action to illustrate some concepts. If you cannot grasp those concepts then I supoose that is your problem. Why don't you post a little of your own trading concepts for all to see and take apart? We could have a little fun eh? Please lighten up and try to understand probability, risk, and reward and how they work together in an environment that is full of uncertainties and that one way of dealing with that uncertainty is to be flexible and adapt on the fly as the PA unfolds, live. Apart from the psychological aspect trading and a lack of preparation in that area, the second worse mistake traders make is trying to make something certain by boxing it in with rules when it is inherently UNCERTAIN. It cannot be done. If so HTF's ...algo's would have accomplished it long ago. See you later ..gotcha....try to relax abit.
This is what you don't understand. It doesn't matter after the fact. If you say your stop is 6 points away, then your stop is 6 points. Whether it hits or not doesn't matter. This is the risk you were willing to take. You're trying to push for an understanding of probability and yet you are doing it all wrong. There is no such thing as actual risk. Risk is something you decide on in advance because that is where your stop is placed. Of course the market is uncertain, but by having a stop and target, you're operating within your parameters that you have set for yourself. Now, the market cannot do anything that you didn't account for because you are accepting that either your stop or target is hit. Furthermore, your charts always show some sort of fantasy profit taking. In the first example you "decide" you would take profits at 3 points, which just so happens to be 1 tick from the ultimate low as indicated by me in red. On the 2nd trade, you decide to only take 2 point this time, once again, 1 tick from the high. All your charts always show what you "may" have done. If you were holding for the 3 point target in the 2nd example, it never came until much later. But somehow you magically knew to hold for 3 the first time, and only 2 points the second time. Everything that you show works well in hindsight and there is no reason for all your varied profit targets, other than knowing in hindsight how far price would go before turning.
with all your indulgence, may i plse upload evening session GC? just for your pleasurable only, with no commercial value whatever: