I don’t use a set stoploss in terms of $$ amount or point amount. The stop is determined by the market action. So I use a price action stoploss. It can be wide or it can be tight. It depends on what is happening in PA. I usually start with 1 contract and add if I need to. There are some times if I deem the trade a high probability I will start with 3,4,or 5 contracts but i will not expect a big reward. It is next to impossible to have low risk, high probability, and big reward. There is always a tradeoff on one or the other. So, if I see a high probability setup with low risk I will load up but I will settle for a small reward unless it just keeps moving in my favor with little adversity. But I know that in most cases High probability, low risk trade will not go very far. A low probability, low risk trade can have a big reward if it works. A high risk, low probability trade, can also have big reward if it works. I know that sound backwards but think about it. In a strong BO say north the stoploss has to be big. I know that too sounds backwards but that is just the way it is. Why? On strong BO’s or big spikes you can have a deep PB before the BO succeeds. So IMO you have to employ a larger risk or chance getting stopped out and then see an immediate reversal back in your direction while your eyes are bulging and coke bottles are flying. You may even think they took the market down and went two ticks past your stop just to get you! When I say you here, I am talking about any trader AND not you, in particular, as a person. In the afternoon I traded the NQ and netted over 1595.00 and actually had more but made a couple of mental errors that cost me. Even so, I still had over 72% win rate. However, in the last 60 seconds of the session I got flat and payed my dues back to the market for the mental errors. But i still ended up +1595.00. I did not trade the ES in the afternoon. As far as explaining the dynamic vs form. In a simple illustration two artist could paint the same picture. Lets say, just for arguments sake, both of their finished products looked exactly alike. Same drawing..same colors...same size. That is the form. But artist #1 painted it over 2 months in 15 minute increments as he was able to find time to do it. Artist #2 painted it in one 8 hour day. Now, if both artist were on the verge of painting each one a second picture on which one would you place your money as being the one to finish first? That is the dynamic. In trading the dynamic i.e. (how a bar is formed over time) can influence the probability of a trade, on the next bar or next few bars, being profitable or not being profitable. But a trader has to see and interpret that dynamic live action within the larger context in which it is taking place or the probabilities, risk, reward can get skewed. A trader will see average win/average loss be closer together when he employs averaging in to a losing position like I did today. In both instruments that I traded today I employed that technique. When I don’t employ it, and maintain a high win rate, then i can, many times, see average win being at least twice average loss. However, context sometimes (like today) has me employing the technique and that hurts the average win vs the average loss. But in the end what trumps all is being net profitable by the close. I was this afternoon in the NQ although i made some errors and had to pay for them in $$$. The biggest size i traded today was 6 contracts and it was a scale into a losing position that eventually in my favor. In the Es I think the largest size was 3 or 4 but don’t remember. Most of my trades start with one contract and end with that or I may add up to 10 but that is rare.
I have to say...."Nice job". You've got quite a knack for this. I've witnessed many other traders demise in the emini markets...it was almost maddening when I was following them. There is this one guy....and ET member....named MBAGearhead who just lost a ton of money trading emini futures. It was painful to watch. His equity curve was nothing short of disasterous. He lost money for about 2-3 years. I keep wondering...who is funding him ? http://mbagearhead.blogspot.com/2009/10/more-broker-hell.html?m=0 You need to give him some lessons.....LOL !! However, it does appear he is "up" in 2018 so far....but look at the prior years....he is making "welfare" profits....at best. Your $1,000-$1,500 avg per day net is very nice indeed Volpri ! Congrats.
Thanks! In the ES i netted 1425.00 this morning and in the NQ i netted 1595 in the afternoon. The sad thing is I actually had a gross profit before losses in the NQ this afternoon of over 3000 but because of two mental errors i lost over 1700 of that. But I ended the day up 1595 so I am not gonna cry. I didn’t post the results in the NQ this afternoon because it was a tad embarrassing (but i would post it if someone was interested) but not many people seem interested in these posts of mine so why should I continue? Maybe folks get tired of seeing this stuff? I am just a little retail trader that lives a simple life and has a passion for trading and excellence in the endeavor. But since I horse around alot on ET ...people probally don’t take me serious. I posted this stuff mainly because someone on another thread said that some calculations he does would be meaningless on my trades if i didn’t give him 6 months of trades to work with. So, i decided to just do it live showing how I have a high win rate and decent average win over average loss. And do it live as the day progresses. And another poster seem to imply i was giving false hope or dreams to traders. I admit it has taken me quite a few years to get to this point but in the process I have never blown a futures account although while learning I had to replenish an account when it became necessary because of funds getting a little low. I could tell folks what and when my turning point was and took place but they wouldn’t believe me and they would just laugh me to scorn. Have a good night.
I looked at that link you posted to his blog above. A trader can’t make money with a win rate and average win/average loss like he had today. Of course, everyone has bad days but over time you just can’t have alot of days like he had today and stay ahead. I read a post he apparently made a few years back called “poor end” here it is: “I executed my plan perfectly today taking every signal until I hit my loss limit at 1:30. The ES swings were crazy today and volatility was back. Too bad my plan was not in sync with the swings today. A fitting end to the month. November will be better.” (Source mbagearhead.blogspot.com) This is what I am talking about. Discretionary vs a mechanical or manual system that takes every signal. IMHO such a creature is a “dead end alley” over time as it will erode an account. Every signal has to be compared to context and the moment by moment dynamics of the market and then, and only then, should a discretionary decision be made to take the signal and trade, or skip the signal. In my books taking every signal that rolls out is a load of IMO It is precisely why traders have a hard time engineering a high win rate. By all means I BELIEVE traders need to cherry pick. And pick only the best trades.
Thanks Volpri. I do appreciate what you have written here. And thanks to syswizard for asking the questions. I'm pretty much a lurker but it strikes me that you talk like Al Brook using the same principle on market, stop loss & dynamic recognition of the current bar forming. Maybe different delivery but the message is the still same. On stop loss subject, I recall at one time he casual mentioned of a friend who said he never had his stop loss hit. I was pretty sure his friend did take loss like everyone else but it took me a little while to figure out how & why. So interesting. Thanks again. And good luck on your quest to search for excellence. Chef
Interesting. Sounds like the way to go is automate the entries, use discretion as to which ones to take, and then close out the trade with discretion.
I find people who do too many "what if's" won't ever become a good trader- they seem to be too scared and always needing a rule for every second. I also think, being a manual trader first and doing well there is easier going to automation than other way around. Learning how to put together a car engine by learning, studying to do before hand like trading easier than taking all the parts off then trying to figure out how to put it back together again but in process you learn the old gaskets won't seal or screws are bent or you need bolts to have proper torque. You come down to having rules, and whether "Discretionary or mechanical trading" are the same. I have taught five people the same system and everyone of them would trade it differently as they understand the rules to be different. I have to agree with @wrbtrader
I suppose that might work, i don’t know. As for me i can visually see my signals quite easy and like the challenge and uncertainty of if it will be a good signal to take or not. I cherry pick all the time. I will bypass what looks like a perfectly good signal if the moment by moment context (dynamics) says it is too risky to take. Even if the larger context looks good. So, i go by context...signal...dynamics reaching the signal...then make an informed decision. I have to admit there is some intuition involved especially in the dynamic part of the process because to interpret dynamics and correlate that with form (signal) can only come after days and days ..maybe years..of watching PA live on an instrument. For me, the uncertainty of trading IS the challenge. I might get really bored with complete automation. I enjoy the process of trading about as much as the money. I am traveling down the road and the wife is driving and I am trading. I took a few trades in the NQ this morning. All winners. Largest trade size 2 contracts. But I am feeling sick from watching the computer and car motion so I think I will stop. Here are the stats. At least some fishing worm money....
I suppose that might work, i don’t know. As for me i can visually see my signals quite easy and like the challenge and uncertainty of if it will be a good signal to take or not. I cherry pick all the time. I will bypass what looks like a perfectly good signal if the moment by moment context (dynamics) says it is too risky to take. Even if the larger context looks good. So, i go by context...signal...dynamics reaching the signal...then make an informed decision. I have to admit there is some intuition involved especially in the dynamic part of the process because to interpret dynamics and correlate that with form (signal) can only come after days and days ..maybe years..of watching PA live on an instrument. For me, the uncertainty of trading IS the challenge. I might get really bored with complete automation. I enjoy the process of trading about as much as the money. Thanks for the kind words. I do “set” a stoploss but not a dollar amount or set point amount. For instance, I wouldn’t say arbitrarily “i am going to set a $200.00 stop on this trade I am taking. Or I am going to set a 4 point stoploss.” No, instead I will look at the past price action (the static form left in a picture made with bars) and the dynamics of the day (how the PA is being made..volatility..etc) and make a decision on what I think is the best SL that will keep me in the trade and give me a chance to make a profit. That SL also has to fall within my max risk I am willing to take. If the necessary stop distance (to put the odds in my favor for a successful trade and not a loss from a too tight stop being hit) surpasses my max risk level then I deem it best to just not take the trade and wait for a subsequent opportunity. I do take losses and at times my stoploss is hit. At other times if the subsequent dynamics (after taking a position) inform me that I am probally on the wrong side of the market with my position then I don’t see any sense in prolonging trade and just waiting for the SL to get hit. In such a case I deem it best to just get out ...take a smaller loss...and look for opportunities to get on the right side of the market. Everyone takes losses. No trader can judge the correct market direction 100%. If a trader is really ...really ...really...good he has about a 60% to 70% of getting the direction right. However, i don’t want some pip squeak SL taking me out of what would have been a successful trade because i based it on some set $ amount or point amount instead of the form and dynamics of the market, in the session which i find myself trading.