God damnit, I've been getting owned by the market the last 2 weeks with a string on small losses that are adding up. The psychology of trading is critical I see ! <b>The problem I repeatedly make :</b> <font color='red'>I see a down trend and keep trying to fade it by buying on what I think are the bottoms and end up getting stopped out. Then 5 minutes later, the downtrend ends and I miss out. I keep thinking I can get the timing right, but never can get it down. </font> From all the books I've read and the journals I've read on this site and everywhere else, this seems like its straight out of a Trading 201 script from a class. Its time for this bullcrap class to be over, I'm not making that mistake tomorrow or any other day. From now on, I'll only risk money and just trade with the current up-trend I have instead of the up-trend I want to have. Had I not been such a fucking contrarian today, I would have made $2k instead of losing $437.47 for the day. The greed of trying to pick the start of a new trend is fools gold I tell you ! Nice one Mr Market, you wont be fucking me over tomorrow with that trick. I'll force you to get me with another, and another until you have no more tricks. That is all. /end rant
Sorry, but the market has almost endless tricks. 10,000 hrs. and you might see them all and maybe even memorize a few.
I have the same problem...constantly trying to pick turning points. Then when i occasionally cave and try to go with the trend on a pullback, its actually a turning point.
dude i had the same problem today also! I traded the mini-dow contracts and tried to fade the down move 30min. before close, and got stopped out and lost my profits for today :/ the trend is your friend.
"Think" == "Guess" Wait for the first higher low, then you'll "know" the previous low was the potential bottom and as a bonus, a pretty damned obvious price level that will tell you if it isn't.
@Trexticle : You may be right, but I went back over the past 2 months, and had I just went with the trend, I would have made way more money than I have lost. I view this as learning to ride a bike. Mr Market has shown me how my own greed is my own worst enemy. Duly noted. I'm going to decrease my size down to $10k until I'm consistently correct though.
All expectations of patterns are based on random order. You have to look at it from a point of view - what if it takes 10 attempts to nail a turn? You need this mental edge if you don't have a methodical edge. So the key is to expect consecutive losses whilst applying some sort of math strategy. Intraday markets can be quite testing, especially for contrarians on a bot trend day. So how would you change your strategy if you were to expect a very low win rate?
Fading tops and bottoms is tough. I can't do it and make up for the loses. Maybe after you've seen thousands of them and can recognize what a real top or bottom looks like you can trade them profitably. Until you can do that reliably on paper, stick to trend following techniques. When I first started trading I could see the potential in picking tops and bottoms but two bad things happen trying to identify them. 1) You start seeing market turns every where and it ruins your thinking for the bread and butter trend following trades. 2) You can't make the full potential of a REAL market turn because your mindset has you looking for the next reversal against your position and you are shaken out easily.