thanks for your passion on my behalf...really appreciate it...all is cool...trust me...really trust me...yes trading is a passion of mine but...again...all is cool...thanks for your interest..
It's a simplified version of what I do. It covers two basic aspects: 1. Objectively identifying a trend using volume. 2. Actually holding through a trend. You see, money can't be made trading. It can only be made by holding a position while being on the right side of the market. Coming in during the last two hours of the day will help to keep your eyes on the ball (you do seem to have a short attention span). It'll also help you to curb overtrading on days when large trends aren't likely to develop. There's no law that dictates the last two hours of the day have to mirror the first four but it'll help you orientate.
Increasenow, Here's my take on this issue. I understand your reasoning in wanting to stop trading if the first one is a loss. Trying to come back to breakeven from a loss can be psychologically difficult. However, trading is a game of probabilities, so you really need to continue trading based on probabilities. For example, I trade ES with a risk to reward of 1:1. On a monthly basis, I have a 55% win rate. Therefore, as I approach each new day, I know that roughly speaking, there is a 45% chance my first trade will be a loser (just like today when I tried to sell short the ES after Bernanke's speech text came out). I could have stopped trading with this loss, but its really important to get over losses as just being somewhat random events in a game of probabilities. It would be like betting on head in a coin flip, but then stopping just because a tails came up on the first toss. After this first loss this morning, I remind myself that overall my chance of a win on the next trade is 55%, so I continue since I have a higher chance of winning. As it turned out, I bought the ES for that final push to the high of the day for a profit. Therefore, its important to continue to trade as long as trades are setting up and triggering according to your method. However, with that being said, I do have money management rules to stop trading for the day. Specifically, I will stop trading if I have a net loss of 3 trades for the day While 3 is somewhat arbitrary, I will stop trading at that point for two reasons. (1) I feel psychologically damaged at that point and I think my trading gets WORSE since its very hard to come back from a big loss--better to take the rest of the day off and try again fresh tomorrow. (2) Winning and lossing trades oftentimes come in streaks since methods that depend on trend trading or countertrend are prone to streaks when the market is zigging when you should be zagging. Therefore, if you have a string of lossers, it might just be bad luck (About 9% in my case for 3 lossers in a row--45% x 45% x 45%). However, it might also be because I am relying to heavily on trend method when the market is choppy and viceversa, so after a net 3 losses (not neccessarily in a row though), I hit the saloon for the day.
You guys are really wasting your time here. He will be back to asking the exact same questions next week. I've already wasted too much time writing this...increasenow seems to be good at attracting well meaning posters with good advice a lot. However, don't expect him to follow your advice and don't be upset when he fails to "get it".
Sir...I am totally serious, not trying to waste anyones time including yours and YES, I do take to heart all the advice...I must be discerning however, meaning, when it comes to taking peoples suggestions..."take the best and leave the rest"...I truly believe that "success leaves clues" and that is why I ask and ask...thanks for your time..again, this is no joke...also, I am sure many have benefited from reading these type of "basic" threads..I really believe I have asked questions that others have wanted to but never did...all is cool, no scam here...best to you!..
I don't wish to see you fail increasenow. It is encouraging to see you wanting to learn but there comes a point when you have to put in the hours and sit in front of the screen then decide what your strategy will be. You have been asking these exact same questions for OVER A YEAR. You are waiting for someone to tell you the strategy/approach to trading and then you will trade which is the opposite of what you should be doing. You were talking yesterday about trading 10-50 lots of the ES. Do you realize how insane that is if you are still asking these types of questions on a message board? You will be crushed trading that many contracts. Here is my advice to you: Trade 1 Lot in 1 Market until you start to turn a consistent profit.
The "BEST" has been to actually sit down and do the work! Somehow you are yet to take this advice. What are you waiting for?
His problem is that he wants the winning method NOW. Since he was in a hurry to have the winning system then unwittingly he had lost time in trying too many things in vain. While he should take your below advice and other members have suggested him to do similar thing to start thing slowly but surely. Generally we obtain very surely and very speedily what we are not too anxious to obtain. -- Jean-Jacques Rousseau (Philosopher 1712 - 1778).