near perfect upward channel on the 5. Very interesting if you look at this serious bear flag after the previous IHS on the all hours 15 minute ES. Me thinks a trail run is in order to clear the head of these scalps. Why can't I get on a trend early and stay there? Preconceived notions.
Well, a tight stop does cause more stop-outs, but it also prevents what just happened in your case, namely, a fade gone wrong. I have found that if my trade needs more than 2 points to work, then I am 80% of the time simply off on the entry price or timing. A stop is where you are wrong on the idea. The thing is, you could look up and down the chart and make a case for numerous points where you might be "wrong." Look at the places where one could short this current up move. Which one means you're "wrong" that it will go down? Lots of people are shorting this up move, and staying in, and will either get rewarded when it goes back down, or reach the pain threshold and bail when it hurts too much. I prefer small doses of pain, even if they are more numerous. Also, when I get myself in the hole early in the day with a -1.00 loss or even -2.00, then psychologically it's much easier to keep my mind focused and clear and on the current market. When I get -3.00 or -4.00, the need to get back to even takes hold, and I wind up overtrading and trading based on my current loss for the day, instead of focusing on the trade I'm looking to get in or am already in. My best trades are the ones that I time well enough so that I only need a 1 to 2 point stop max. Any more than that, and for me personally (this is the key, as your situation may be different), I've usually entered too early, or at a poor price (usually because I entered too early) -- this is what I did this morning on my short that thankfully I got back in. Bad entry price due to not being quite patient enough. But then again short is not really where I should have been looking, but that's another can of worms and hindsight is 20/20. People say exits are more important than entries, and for a trade in profit with a good buffer, then of course the exit is more important because the entry is already done. But a good entry allows one to operate from a standpoint of profit and not fluctuating between profit and loss. Take my words with a grain of salt; there are much better traders here that can chime in on their preferences. But in the end it has to be what works for you, regardless of what anyone says.
Great points Josh. 10 1/2 wins is easily killed by one 5 point loss while holding out. the psychological effect is probably the worst side effect in both blame, missed opportunity, or worse, seeing it turn just as you exit and then proceed to hit the initial target. Those psych effects tend to stay with a trader a long time and can hurt or impair the vision in future trades. spot on.
+1 to JD and Trvl as well! There are strategies out there that allow for minuscule stops if that ends up being one's preference. The next step after identifying them is working on having the patience to wait for those setups.
Thank you, I actually just type very fast (about 100wpm when I get going) and reload the thread often.
Amen brother, I think it will be a lifetime of work for me; I can't stand to wait in line at a fast food place for more than 30 seconds, so trading has taught me a lot about the need to slow the hell down, because every time I don't it hurts my account big time!