Meticulous study provided me with a fixed stop for my style of trading. What this "fixed stop" style of trading taught me was how to be patient in waiting for setups that allowed my fixed stop to survive. In other words, several conditions had to be met: Price had to present a valid setup and the valid setup had to be such either my max stop was survivable or 90% of the time my max stop would survive even if technically it wasn't survivable. Once I had a fixed stop that would work for the setups I wanted to trade, I then chose a minimum profit target that was greater than my max stop. The minimum profit target meant that even if a setup looked good and my max stop was survivable, if the range of the expected move to next S or R was unlikely to provide me with enough "space" to get the minimum profit target, I would avoid the trade and wait for a setup that met all my criteria. Market conditions changed abruptly over the past few days for the instrument I trade. As a result, I had to increase my max stop; however, I also increased my minimum profit target to compensate for the additional risk per trade. Until this week my max risk per contract was .15 and my minimum acceptable profit was .20; this week my max stop is .20 and my minimum profit target is .40. I simply adapted to changing market conditions in a way that made sense: I accepted greater risk during extreme volatility, but increased my reward significantly as well.
If you miss the proper entry, wait for the next setup. Think about it: A bad entry reduces your potential profit and increases your potential loss. Why would you want to do that?
RN, I appreciate your contribution and the discussion. Will need to think about it some more. RN, I think Lf means that different set ups call for different stops, for example counter trend scalp will have a very small tight stop, vs a with the trend trade may have a bigger one, they also have very different profit targets.
NoDoji, thanks for commenting. I think there is a confusion (at least for me) between fixed stop and max stop. I\'m not opposed to max stop, for argument sake let\'s say it\'s 2.5 es points. then I wouldn\'t take a trade that has a target less then 5 points. But certain entries don\'t require such a large stop, so I would use 1.5 points stop, for example. Why do I need to risk my max 2.5 point stop if my set up will be invalid after 1.5 points loss? and the reverse logic works also. If this trade only makes sense with 3 point stop, then I either wouldn\'t take it, or reduce the number of contracts to accommodate for a wider stop, especially in periods with increased volatility. But I wouldn\'t take this trade and put 2.5 point stop. It just doesn\'t make sense to me. I hope it makes sense.
I think my problem is both - the discipline and the trading method. I did backtest many things in the past, have numerous notes, etc. but I think I have too many set ups that I tested and use and I am getting them all confused. I need to sort out the set ups that I have and start from a clean plate and slowly start adding the good ones back up, one at a time. that\'s why I\'m back on sim and sorting things out. And charts will be coming too in time.
Fair enough and thanks for the clarification...1 - 2 setups is enough on the plate of a struggling trader. Yet they should be giving trade signals in different types of market conditions. By the way, you'll bring to surface what's going on in your trading to yourself and to the readers when you start posting charts at the end of your trading sessions. Just as important, you should post at least once what everything looks like on your monitors because a maximize chart of your trades is a lot different than an image of everything (charts, broker platform and any other windows) on your monitors. Thus, everything seems clear on a maximize chart but looks a lot different when that image is smaller and next to many other windows on your monitors...resulting in what I call reaction lag. Mark
Hereâs a fact BL⦠Human mind can only focus on / think about one thing at a time â the more you can simplify â the better =============================================================== And like NOD, and I've said â a fixed stop has built in discipline â something you desperately need Sure setting stops based on PA can be done⦠BUT 100% of the time..., in the middle of trading...., with 100âs if not 1000âs of thoughts racing through your mind â are you going to be able to get it right every time - seriously..... Yesterday you had trouble waiting on a good entry for Christ sakes - what's next.... ============================================================================================ And wait till you are trying to set your stop.., after entering..., and price pisses off past you..., and where you would have set your stop..., and now youâre looking at a MAJOR loss straight out of the gate You have a lot of getting your ass kicked by the market left - to experience â trust me Try to keep it real today...., and not view it as some video game - professional's don't It is all your choice. RN