I call'em as I see'em. Speaking of rude, how about Jack's recent post with the word f*ck used 28 times. Now, there is one classy guy. http://elitetrader.com/vb/showthread.php?s=&postid=1084428#post1084428
I realize that it is difficult to read and comprehend all the points a person may make. Even more so if you have a pre-conception about the poster. Let me re-iterate something just in case someone was listening. IF you use a reference, you have a better chance of seeing a bad entry in time to get out with a scratch (break-even, wash, whatever you call it). I mostly trade the Russell, so I use the ES as my reference. I have both charts up side by side. I monitor the ES as the Russell price moves to my expected entry site. Ideally I want to see the ES display what I call an "impulse" move through my entry point RIGHT BEFORE I pull the trigger. If instead I see the ES oscillate or move adversely, I am likely to either pass on that entry or if I decide to roll the dice, I won't take much heat before I exit. This technique works significantly better than any that I have heard you folks suggest, and it can be modified to work with equities. Good luck Steve
entering on momentum - so you want to say that a trade always has to go in your direction at least a few ticks right after your entry - and then if it retraces you can decide whether you go out with a small loss or b.even? ok - fine. and how can you make sure that every one of your trade goes in the right direction FIRST?
looking back on the LOSING trades - yes of course i would be happier if i had a loss of 1 tick instead of 1 pt. what you have to remember though are the winning trades - did not one of them ever go a little bit against you - before it probably turned a big winner?
Yes, indeed I have read around MAE. Although I am not Sweeney's biggest fan, he does have something to contribute. In my humble opinion, such measures do have their uses, but to the thinking trader, reality is always king. The lazy trader who has a destiny with failure always loves to reduce thinks to scientific numbers. If only the complexities of modern markets (and inded human emotion thus reflected within) would allow this. May I suggest you take more time in researching this Maximum Adverse Excursion concept more fully - especially in regards to your own equity curve. Doing some of your own thinking rather than relying on Guru Gospel may indeed enlighten you further too! Wouldn't that be fun! Please stop trying to be cute. I don't think it is to your best self-interest here. Mike805 & EasyRider: Thanks very much for your constructive findings and thought. I have benefited from reading them.
Most traders who lacks the brainpower to "reduce thinks to scientific numbers" find comfort in dismissing objective, quantitative analysis for various reasons. But that only works on message boards. If you think MAE is "Guru Gospel," you're mistaken. It's not. It's just another metric, limited in use by the intellect of the user.