Getting out - Am I Doing the Right Thing

Discussion in 'Trading' started by Flashboy, Jul 16, 2003.

  1. That is pretty much the same with me.

    I use 1 min to trade off the open. 10-15 mins into the day I'm on 5min and either 10 or 15 min candles and working with those. This gets me entries very nicely, while the 10 and 15 min candles give me a good handle on the direction for the day and general trend if any (be it quick moving or a slow grind), and 10 or 15 can give me additional entry points clues, and refine where the exits are going to be much more clearly than smaller bar sizes.

    Stops are between 15 and 20 mins behind the price because, 15 min candles sometimes go that 1 tick out to take a stop, but two 10 min bars are more rarely breached unless it is a reversal anyway, in which case there has probably already been a signal to switch sides...

    Best

    Natalie
     
    #21     Jul 16, 2003
  2. dbphoenix

    dbphoenix

    Any thoughts as to why you don't trust it? Are you using it after having only backtested it? Have you paper-traded it? Or has it been successful in RT trading but is beginning to fail you?

    Perhaps your strategy is just fine but it's too similar to a previous strategy that made you fearful.

    In any case, the first task is to determine whether the problem lies with the strategy or with your fear of loss. If the latter, you have a lot more work ahead of you. Pull out and go back to simulated trading for now.
     
    #22     Jul 16, 2003
  3. manz66

    manz66


    Your method allright, if you are scalping. On the otherhand, if you are a scalper, you should have entered again when rebound failed.

    If you are a position trader, then you should have a predetermined exit strategy, like entering with 1.5% stoploss, then follow with trailing stop or 3 to 1 risk, or take some profit for the comissions and taxes, or add more contract if you are winning, etc, etc.
     
    #23     Jul 16, 2003
  4. Another thing to take into consideration, is look at the bigger picture, instead of every tick.

    The futes were < open print, on good INTC #s.

    That there tells you alot about the direction.

    For today anyway, who knows after that.
     
    #24     Jul 16, 2003
  5. What was your exit signal on 15?

    Mine was the VDU (very dry up) on the 5 min for the "inside bar (volatility compression). I was out just above the prior bar close near the end of the 5 min bar period. I did a prorata volume compared to prior 5 min bar. My protection was at 992+one tick.
     
    #25     Jul 16, 2003
  6. Kap

    Kap

    The dow hitting 9050 and the German Dax taking out yesterdays low of 3365 was mine.... usually would have been liquidity drying up through bar but I was arbing Dax and it was time to cash in.
     
    #26     Jul 16, 2003
  7. Tbill1

    Tbill1

     
    #27     Jul 16, 2003
  8. Good points! I agree.


    To the guy who opened this thread:

    Particularly important is the simulated trading point. You can always use a free trading frontend like futures-trader for IB which is excellent and free for simulation mode! You cannot lose money in sim trading, and you can learn, thus earn lots! Even I still use it frequently to test and optimize new strategies before capitalized implementation. Particularly for scalping, since it gives you realistic slippage etc...

    It is always good to remember that even the most successful strategy can 'wear out' one day. Part of the skill of being a trader is to be able to realize this before it draws on your account.

    Always re-evaluate your strategy objectively and statistically. What is your hitrate compared to 2 months ago? 2 weeks? Average profit / loss ratio? Sterling ratio? You can take this anywhere, but the point is in knowing whether your strategy (still) works or not. If it does, and your cold stats prove it - There is no reason not to trade it.

    Also, if you have problems with the execution (emotions!), you should learn to program your strategy to as much as possible automate the trading process. Discretionary Trading is not good for anyone but seasoned Traders, and even many of them frown upon it. If you develop a system that spits out buy & sell signals and gives you good profits on a statistical base, then all you have to do is follow that system. It's about trusting in it. If you know (by stats) that it works, then you can pull the trigger with confidence and don't get shaken out by poor stops.

    Once you have a good amount of confidence and discipline, you can consider putting more discretionary points in your system. Again - handle with care. Another advantage of automating systems is that you can pay more attention to the market etc.

    The most important points, however, is to understand market flow. You've got to know "where you are" at any given time. Listen to the market. I.e. Look at the succession of highs and lows. Has the most recent high been penetrated? Marginally? Expect a retracement and then retest to that high if the retracement is 40-50%! If it's more than 50%, chances are the market is trying to tell you something about the trend.

    Do you always look at these factors before you enter a trend? All timeframes? Do you look at the bigger picture, i.e. 30 / 60 / D chart? With modern technology that can calculate retracements in a mouseclick, there's no reason not to!

    Understand the relationships between smaller and larger timeframes! Understand what the market does at what time!

    Look at the recent issue of Active Trader Mag (May 03) - It's got an article detailing the "Morning Reversal Strategy" with great statistical figures. It's a fantastic strategy in itself, but it is even more important to know these times if you want to trade early in the morning like you did today!

    Yesterday, for example, this strategy worked extremely well - The gap was small and the MA's in favor etc.
    The pivot times were all matching accurately to the statistical average;

    Wednesday, 16/07/03, ES;
    Average Morning peak: 9:36 Actual Morning Peak: 9:31 (5mins early - confirming the bias!)
    Average Price Jig : 9:42-9:47 Actual Price Jig: 9:42
    Average Gap-Fill : 9:53 Actual Gap-Fill: 9:53

    Knowing these times, for starters, can save you a lot of headaches. I scalped these pivots and made a few clean points. What you need is confidence in yourself by knowing what's going on. Unless you know the times and market flow, you can't.


    See, this morning for example, I was short right from the open (9:15) - for several reasons:
    +Price was above 200, 600 EMA, both after a clear downtrend.
    +Price was hitting the top of a down-slope Fibonacci Circle (most reliable of all)
    +Price clearly didn't like prior closes' 61.8% Fib retracement + double-top.
    +Gap was small and likely to be filled (see MR strategy)
    +Heavy Stochastic oversold levels (98+ on the 21 Stoch)
    +Once the market showed no strength even during + after pivot times, I just hung into in the trade.

    You see, all these indicators etc are just figures and nothing special or magic since everyone can see them, and your chances are 30-40% that you're wrong even after looking at all of them. But once you're in a trade - Stay in for as long as you can! Don't trail your stop-losses too tight, that's a fool's trap! Don't forget that it's the professional's job to shake you out of the tree!
    By the way, "Tree-shaking" is a common term if you ever traded stocks. Naz and Nyse traders know all about it!

    Again: Don't make yours stop too tight - Or you'll be feed for the pros!

    My stop was 3 points and when it hit the ground, I was stopped out @992, locking in 12pts - Had my stop been tighter, I would have risked getting shaken out of the big move! I can now get stopped out of 3 trades with 3-point stop and still be in the green zone!

    The shorter your TF on the ES, the harder it gets my friend. It gets hard. The spread is pretty large for scalping... Better off doin Naz stocks for that!


    Hope this helped a bit. Make sure you gain confidence by knowing your strategy stats inside out, and then stick to it.

    Sincerely,
    ~The Scientist
     
    #28     Jul 16, 2003
  9. Kap

    Kap

     
    #29     Jul 16, 2003
  10. WHAT THE ..... ? :confused:

    What's your problem man? I execute everything intraday off 1 & 3-min charts! I also scalp - I even trade the Globex session off 2-min charts. So what??? Do you have any idea how many traders, particularly pro scalpers, use these timeframes?

    Don't make insulting judgments about other traders, particularly if you don't know what you're talking about! :eek:


    Disregards,
    ~Scientist
     
    #30     Jul 16, 2003