I'd like to become a better trader

in other words best, you are still having trouble accepting being wrong,it will probably happen in 60% of your trades,embrace it,then figure out how to minimize the damage when it occurs,still playing head games with yourself,this obstacle is the biggest wall in front of your making/breaking..play the sim like it 's real

 

You did read the part where she mentioned that she adjusted her stops this week to accomodate the extra volatility, yes?

It goes without saying that if the market`s volatility increases by a substantial amount, you would need to adjust for the increased noise. If not, you will get stopped out more than you are used to, unless your entries are perfect.

If you are okay with getting stopped out a lot and potentially taking a lot of small hits before taking a winner, that is fine, but you will probably miss out on many moves that you usually are able to anticipate.

You asked of an example of how I know that a certain stop is needed? I believe I already provided that, but I`ll give you a quick simplified example.

Say I believe we are forming a double top and I`m looking to short. The first top was at 1200. We are currently trading @ 1198 and I believe that we might not take out the previous top and I want to enter short right now. Filled @ 1198. I use a 1,5 point stop most of the time. This would place my stop @ 1199,50. Now, I could place a stop here and risk being stopped out from noise while still being correct on the direction, or I could place the stop @ 1201 since I believe that for the market to tank (and my idea to be correct), it would be far less likely that we retrace that much.

Another way to do it could be to use a fixed stop of 1,5 points, being stopped out and then re-enter in the same direction.

Or better yet, reading the market so well that you don`t need more than 1,5 point to prove you wrong

On other trades, I might be willing to risk only 0,5 points.

I don`t believe we should argue this much further. It`s just a matter of styles and I don`t think we disagree that much either. I basically use 1,5 points most of the time, but I know that I can use 2,5 on a rare occasion if I feel strongly about it or less than 1,5 if that makes sense. It hardly takes up much mental energy to control this in real time.

I do however agree that widening stops just because you can is not a good thing, if it happens because your entries are poor and you are constantly too early and need "forgiving" stops. That is not what I`m advocating.

NoDoji,

I was not aware that you used a fixed stop. You mention maximum stop and fixed stop in your post. Are those synonymous?

What you write makes a lot of sense though. I need to think more about this

Thanks,

LF

 

Appreciate it laissez

Your answer tells me all I need

Now let’s focus on helping BL, IF he’ll allow it




Although I am chuckling that you are rethinking NOD’s fixed stop – if you only knew

Should you adopt it – all the better – in a couple of ways….



And no; traders never adapt to conditions - we simply go blindly into that good night - too funny


RN

 

Since I have a max stop, period, I consider it fixed. It can be smaller if that makes sense, but it won't be larger, so I consider it fixed.

The important thing is that I increased my stop size a small amount, but I increased my minimum acceptable profit target by twice that amount. This has served me very well. Today I took back to back losses, but by holding the very next trade for full target (didn't even move to lock in the minimum), I ended up with a profit almost twice as much as the two losses combined.

 

NoDoji thanks for clarifying, it makes sense now.

 

BL


Couple of things

First

Thinking and posting about stops last night in another’s thread – I came to realize the stop I called B/E is actually a 1 to 2 cent stop (but never more than 2 cents)

I’ll use it, for example, where price is butting up against S or R, and it will either hold, or not…. And I am not willing to risk more than commissions and a penny to find out.

To be clear

My "fixed" stop never moves - and it does have enough wiggle room to allow price to move about, but not break my account when hit.

My B/E stop is actually 1, or 2 cents, plus commissions

And as your P/A skills improve – it is absolutely the right thing to do – to use that skill to “reasonably” decrease the amount you risk based on PA – Protect capital fist is our mantra


BUT doing this also means you are thinking/ assessing/ making more decisions – and less focused on reading PA / actual trading..

It also means the potential for entering goes up exponentially (less need for patience and discipline - and something you lack)

I submitted the “fixed” stop as a tool to combat this..., that you could evolve out of once yotu patience/ discipline/ PA reading/ trading skills improve


Also I'll add; my “fixed” stop is such that I can incur several in a row and they won’t adversely affect me – money or emotional wise

I take em and simply keep on trading

My apologies for the confusion and not explaining it


====================================================================================================
Second


NOD, Ammo, and I have been trading for awhile – LF is new – so when I refer to the traders in the below it is NOD, Ammo, and myself I am referring to


First – strictly from my stand point


When I first read through your journal – I see a lot of me, and where I used to be – in you (with the exception I believe I was more open minded and willing to change – I just didn’t know how)

I'm pretty sure I’ve hit every one of your “touchy” issues – with my posts…. why, because I see you in me – and I know every one of my weaknesses….

I have worked my butt off to identify every one my weaknesses… The difference is I’ve accepted, and now embrace evey one of them


Over time the market will expose, and exploit every weakness we have - to make us lose – and truthfully it is not the market exploiting us – it is us..

Each of us is our own worst enemy, until we accept that, embrace it, and then evolve into our best friend – sans any ego.

Because ego is the worst enemy of all, closed mindedness is the second worst….

So yes, I truly do have a soft spot in my heart for you… but I also know I can’t do it for you… and ultimately your success or failure is your responsibility.


I was adamant you apologize, not for me, and not for the other traders – but for you…. Hard pill to swallow wasn’t it…

=============================================================================================


The traders who are trying to help you (specifically NOD, Ammo, myself) have very clear eyes… We developed our clear eyes first by exposing our self, and our weaknesses/ faults – to our self

Now we use our clear eyes to identify, decipher, and exploit emotional/ psychological weaknesses in the market – every day


It is that same skill that allows us to see your deficiencies, through your writings – you can’t see them, but we can clear as day…

And so can the other traders reading your journal.


We are giving you feedback – based on what we know won’t work, if you want to be profitable, and succeed.

We know these things because, without exception, we have had our asses handed to us in spades..., and repeatedly..., by the market…

We don’t give you feedback to belittle or berate you, or inflate our egos…

The feedback you’ve received is truly from the heart… and it comes from lessons learned the hard way… in some cases very hard, and very costly ways (both monetarily and emotionally)

=============================================================================================

You think you’re being open and receptive – you’re not

You think you are taking this seriously – you’re not

You think you can become successful by doing less than 100% - you can’t


NOD, Ammo, myself – know what it takes.., as do some..., but certainly not all..., of the others who’ve posted in your thread

We are professionals (retail professionals, but professionals nonetheless), we trade for a living….


You can either “willingly” take what’s been shared and benefit… or remain wallowing

You are no where close to where you need to be – either accept that…, and start doing the necessary work…, with the necessary mind set

Or not


Trading is so flippin easy it ain’t even funny– and anybody and everybody can sound like they know how to trade

====================================================================================================
Developing a trader’s mindset…

Where one must expose – yet completely accept – one’s flaws…

Where one comes to know, and accept – uncertainty

Where one comes to understand one’s opinion – means nothing

Where one is completely open, receptive, and trusting – in what one sees

Where one can maintain no opinion, no bias – yet take decisive action

Where one can take decisive action – without hesitation, or reservation

Where one can remain patient, focused, and disciplined – for as long as it takes


These are only a few btw – but enough for you to get the point

Is what differentiates us – that and having the ability “consistently” do it….

==============================================================================================

You are no where close to this……

Like I said – I have a soft spot for you – because you remind me, of me back in the day – when I was stupid, full of myself, and couldn’t find my ass with both hands

===============================================

I keep saying it is your choice..., and it is – If you want it

But if you want it – then you need to step up – and do what it takes

If we are truly kindred spirits – you will

If we’re not – then I am wrong



Like LF said – I talk too much – but I’m okay with that…. along with all my other flaws/ faults... It is who I am...

RN

 

Yes, Redneck. If not too much, you do talk a lot

Seeing your need to defend your viewpoint and "be right", I do believe we may have touched one of your issues as well.

NoDoji did clarify that she: 1) Widened her stop this week to accomodate the increased volatility; 2) Have a fixed stop in the sense that she honors a maximum stop (just like I said I do), but that she may use a smaller stop as well.

Then you proceeded to say that you chuckled when I was considering what she meant about her fixed stop.

Funny, isn`t it?

Good weekend all! I`m off for some beers now!

 

Laissez

If you wish me to be wrong – then I am wrong

If you wish me to be belittled – then I am belittled

If you wish to feel superior – then you are superior

If you wish it to be funny – then it is funny


NOD, well she is my friend, and my colleague – period


I trust this satisfies your need


Now may we please get back to BL…, he is all that matters in this thread

RN

 

This week was a critical test of my trader’s mindset. Not too long ago I posted a concern on CL Redux about adapting to trading CL as it was breaking into a higher price range and volatility level with which I had no experience. I knew I’d have to adjust the size of my stops to avoid getting chopped up, and more importantly I wanted to be sure I’d be able to hold through the volatility for larger profits. I was especially concerned that increasing the size of stops would cause me to become focused on loss instead of gain, and affect the trader’s mindset I’d worked so hard to cultivate.

This week I was tossed into the maelstrom of wide swings as price broke to new highs with power. Because I had worked so hard over the past year to cultivate the trader’s mindset, I was able to adapt quickly without fear and I found that my trading was even more aggressive because I increased my minimum profit target commensurate with my larger max stop and it felt plain good to make more money.

As an inexperienced trader, having been humbled by the market a few times over, and before even knowing what a trader’s mindset was, I might put on a trade, and take a loss. I’d then have a new state of mind, one of self-doubt and fearfulness. I’d see the next setup and think, “What if it’s another loser?” In my quest for certainty that it wouldn't be a loser, I’d find obscure reasons why the setup was confusing and I shouldn’t trade it. Sometimes I’d go the rest of the day talking myself out of trades. If I passed on a trade and it turned into a great move, I might start revenge trading (trading without waiting for the next solid setup). Maybe take another loss. Maybe finally catch a wave in my favor and cut it short as soon it covered the previous losses.

I know now that I wasn't alone going through these processes, because I see so many traders here struggling with these same issues.

Here’s an example from yesterday of the New Me and how I traded with the trader’s mindset RN describes above vs. the Old Me:

Eastern time

01:17pm Long CL @ 97.46, stop just below the previous bar’s support level, looking for a breakout of an internal double top (97.70) and targeting a move to 98.20, which was a previous support becomes resistance level that I’d noted before starting to trade yesterday morning. Since there was an internal double top of 97.70, I planned to reverse short at the same price I’d be stopped out, because there was no clean strong trend in play.

01:19pm Stopped out for the loss and now short at what quickly becomes apparent may be a pivot low off the trend line. I was so focused on the 1-min and 3-min chart, I forgot to cross-reference my main 5-min time frame (where I'd draw trend lines) and completely missed that price was pulling back to the trend line and hadn’t quite got there yet.

The Old Me: I’m an idiot! Why didn’t I wait for confirmation on the 5-min chart before going long in the first place? And why did I short when there’s a trend line right there? What was I thinking? I can’t believe I did this! What's wrong with me? Why can't I follow my rules?

The New Me: Oh no, I was focusing totally on the smaller time frames and forgot to look at the 5-min chart. The trend line is right there and I should’ve waited for the pullback entry off it. If this short is stopped out and I switch long at that same price, it’s a now fully confirmed entry and my profit target is nearly twice these silly losses. I really like this one!

01:28pm Stop loss on the short is hit and I’m immediately long @ 97.50. Price moves up a little, wiggles a bit, dips just below my entry, then runs back up toward the internal double top, breaks it by only a single tick, and wiggles around indecisively for a minute or so.

The Old Me (assuming I even took another trade): Oh no, it’s a failed break through resistance, I better grab my profit here and cover some of those losses before it sells off. Whew, got almost 20 ticks on the trade and erased over half the losses!

The New Me: It’s run 20 ticks in my favor and if it retraces that entire 20 ticks, sellers will definitely step in off that failed break of the DT, so I’m moving my stop to break even here. If price then breaks the previous bar’s low, I’ll join the sellers and switch back to a short for a break through the trend line. Right now, the plan to hold for 98.20 zone is still good.

01:33pm: After that minute or so of wiggle, price makes a new run at 97.71 and breaks out nicely.

01:35pm: Price is about to touch my 98.20 target zone and I quickly move my stop up to lock in a profit @ 98.10 in case 98.20 indeed becomes resistance for this breakout. I’m taken out of the trade exactly 10 ticks from the 98.20 pivot high of the move for 60 ticks of profit. Despite making a couple mistakes because of focusing on smaller time frames without cross-checking my main chart, I’ve made a fine net profit out of the trades.

It’s so difficult to get to this point, but the rewards are absolutely worth it. No one can do it for you. It’s a personal journey requiring an immense amount of study, analysis, and enough trust in your edge that no individual trade result or group of trade results or occasional mistakes affect your ability to trade the very next setup that presents itself and manage it according to your rules.

Your P/L throughout the day will be irrelevant. You’ll be trading in the zone, trading every valid setup and managing it according to your rules. If you make a mistake, you put it behind you, keep calm and carry on.

 

Morning BL

What’s your plan today;

Trade – play a video game – play hookie


Carpe diem..., or not

Your choice

RN