This is how easy it is for an average retail day trader to blow up while trading according to solid rules. You go long a $20 stock in an established uptrend with 2x leverage out of the 4x leverage you have available on your $50K trading account. Never risking more than 2% of your account on a trade, you place a .20 stop loss to protect your capital and are looking to capture a .40 profit as soon price makes an expected new high. Suddenly trading is halted and very bad news is released. When trading resumes the best bid is $5.00, your stop loss triggers as a market order and you immediately lose $75K.
I agree with this. When I finally learned to do what everyone else is doing (buying when more people are buying than selling and selling when more people are selling than buying), I became consistently profitable without any significant drawdowns. Can anyone show me an intraday 5-minute chart from the past 10 years for a popular futures contract (ES, NQ, 6E, CL), or a popular high volume day trading stock/ETF (AAPL, AMZN, DAL, JPM, POT, SPY) where at least 4 basic price action setups didn't present themselves or presented and all of them failed? This belief about having to adapt to changing markets over time as a day trader just makes no sense to me. I agree that you may need to switch gears from trading a strong intraday trend to trading a range or trending channel, but whether the market as a whole is in a strong bull, a strong bear or a consolidation range, the intraday moves on popular futures contracts and high volume stocks will always offer a few trades every day that produce basic price action follow through IMHO.
Hi Nodoji, At the risk of seeming like an imbosol, what are the "4 basic price action setups" you're referencing? thanks, Walt
Experiencing success is measured by what, how and why a person used given tools to become filthy rich. Wiliam J O'Neil represents the fast track to riches. Review his institutional package that originally rented for 44K a year when it came out of beta. His approach is totally canned. I am just making the point that being a successful trader is a 6 month trip and it doe not have anything to do with stats and guessing to bet. In fifteen minutes a person can use any drag and drop to have a routine that tests at a 60 plus Sharpe ratio for trading stocks. NO indicators are used in the drag and drop. Instead carnap's logic theory is used with repsect to price and volume. The meausres are binary. Gerunds in the English language. you recommend the CW path of the financial industry. It does not "beat the averages" as the financial industry reports to all of us. On the other hand, a person can use the market's offer as a standard and extract the offer using non probabilistic information theory. Now to consider hijacking. You may want to reconsider your orientation and comment. You are broadening the definition of hijacking. A point by poiiunt repsonse to a post (yours) by me does not make me a hijacker, in just my opinion. Here in ET when I hijack a thread I literally take it over and control all the thoughts of interest in that thread. Here in this thread I only presented, previously, some easy measures of success. Your post made several points that are the fodder of CW in the financial industry. I just posted the "workarounds" to avoid foregoing "success in trading". Trading intraday in markets involves a "taking". What is taken is a multiple of the daily range. One rule is used: stay on the correct side of the market. For me in the ES this is 25 to 40 trades a day. considering the daily range; it wold be difficult to make less than a multiple of the daily range when staying on the correct sideof the market segment by segmentof profits. I use a check off log. One column is foe sentiment. Another column is for continuation or change. C is change and X is contiuataion. A set of four gerunds describes the two market variables. This is two hypotheses that pair the leading veriable of price and price. Arrows are used to record the gerunds for the leading variable of price. X and C are used for price trending. See if you find anything unique or original or probabilistic in my notes above. If you do not, then you can conclude I do not see the need for any statisticulating for trading nor making money. Consider the doji. Consider the ends of bars in terms of extremes. The binary vector is the key to making money trading. Use leading variables of price to trade price. For change I keep[ a checkoff of peaks and troughs of volume. Trends have onlt one pattern in markets. there is a correspondence of three price moves to four volume events. To contain three price moves you need four ends. Volume states these ends in advance of the price moves. QED. You will know when I am hijacking a thread. I do not hijack posts i a thread; I just make point by point comments sometimes when the poster is way off topic. Here the topic is success and what measures or provides success. Please put me on ignore to better solve your situation. I'm what you may call "bad news".
This is interesting, experienced my 1st loss in weeks: -$700 today, warning of bigger loss to come? I better watch my back from now... Need to stay humble....... But the main reason today for losing is breaking one of my rule: Should not trade after 1pm...Got whipsawed
I didn't mean "the 4", rather "any 4" price action setups: Price finds support at a higher low, go long. Price found support at a higher low and is about to test the previous high, buy the new high. Price finds resistance at a lower high, sell short. Price found resistance at a lower high and is about to test the previous low, sell the new low. Price is making higher lows and higher highs in a channel, buy at the bottom of the channel. Price is making lower highs and lower lows in a channel, sell at the top of the channel. Price made a strong run up and consolidates in a narrow range, buy a break through the high of the range. Price made a strong move down and consolidates in a narrow range, buy a break through the low of the range. I've never seen a 5-min intraday chart where these kinds of setups fail to occur and have expected follow through at least enough times in a given day to end up mildly profitable if you trade them.
NOD By the very nature of the way you trade - now You are continually adapting â and with out consciously thinking about it... Something to ponder Ma'am RN
one of two things happen - either you are wise and walk away while you are ahead - even +$1 is ahead... or you wait till its sucked every dime out of you Either way you've been there and done that. There is no such thing as "made it" IMHO.
I wouldn't want to miss all the fun now that I have you calibrated. I'm tempted to ask what situation it is that I have to solve, but I'm afraid you might try to answer it. __________________ Author - "These Seven Trading (Investing) Secrets Will Explode Your Account: All I Know About Trading (Investing) I Learned in Flight School"