Journal of ashes and Eminis

Whether your recognize it or not, you've just stumbled onto one of the great disciplines of trading... that is, "Your ENTRY should be determined by your STOP"... Most rookies get it the other way around. If the light didn't go on, mull it over a bit. It will.

 

I realize the method of r/r I am playing with is a bit backwards. It is intentional in that I am playing with ideas, and it isn't how I have typically traded most of my "trading career".

My rational for playing with this method is that I tend to have a "good" record at picking places the market will hit, but have never been good at capitalizing on it. So, I figured that if I "know" where the market is going, I might as well put an exit order there. Which leaves me with the need to enter the market, and to place a reasonable stop. I have paper trading this system and generally do very well. But, then with paper, and don't feel the need to tighten my stops quite so much.

 

My light keeps flickering. Guess I just need to screw it in a bit more.

 

What is "reasonable", however, will be the most logical price to place the stop according to the chart rather than according to how much you're willing to lose. Gnome is correct: figure out the most logical place for the spot first, then project, if you like, a potential target. Or, if you have a low-risk/high-probability setup, just let your profits run and forget about targets.

--Db

 

Reviewing this thread, I realized that what I've been saying is almost exactly what I said last October. Sorry.

--Db

 

Absolutely no reason to be sorry. Repitition is essential in the learning process. I might actually be in a position now to start applying what you wrote in October. Guess I need to re-read it as well.

 

BTW, are you the guy from SI, the one with the emini thread?

--Db

 

I talked to a bond timing program manger in Florida a few years ago and asked him how long he'd been in the business. He said, "long enough to make the same mistake I made years ago and not recognize it until it was too late... I saw it quicker, but not soon enough to save my bacon..." It's the nature of the beast.

 

I'm not sure what SI is, so I'll venture a guess and so no? I have no other trading threads anywhere on the Net.

Edit: BTW, what connection do you see?

 

Your handle. He calls himself "the phoenix".

--Db