Well then lemme esplain a bit Some context Iâve id that price is ranging; say 45.10 to 45.50 Hence Iâll trade it as such If I were to go long, I would consider it a fail trade once price hit 45.09 If I were to short, I would consider it a failed trade once price hit 45.51 My stop is .04 cents =================================== Soooo Before I can enter a long; price must come within .04 cents of 45.09 Likewise before I can short; price must come within .04 cents of 45.51 Any more than .04 is more risk then I am willing to assume ================================= Never do I identify a stop by a % of my account⦠my stop is always .04 cents (or whatever âspecificâ amount I choose) Granted I can certainly do a little math and come up with what % of my account is at riskâ¦. But Iâve yet to see a % of an account reflected on a chart⦠Otoh; I know exactly where .04 cents from where any given trade would fail â isâ¦, immediately ================================ This example is based on horizontal price movement... it works diagonally as wellâ¦. =============================== I view this stop methodology (thinking in terms of cents) as a fundamental building block⦠imho It instills identifying/ focusing on where a trade fails It makes one read/ think in terms of PA It instills patience â must wait till price gets within my designated loss amount, otherwise if it doesnât, Iâll simply sit this one outâ¦. It helps in focusing on trading... instead of oneâs account Losing .04 cents (or whatever one decides) is a lot easier to accept and move on from, than say losing 40.00/ 400.00/ 4000.00, or what ever Think through this please, maybe youâll agree⦠and maybe you wonât ======================================== And yes theyâre many ways it can be applied/ and many variations depending on current PA â but that is a separate discussion For example; Some trades are B/Eâs â iow they either work immediatelyâ¦, or fail Others are on a time stop (and I am pretty damn impatient as a general rule) Others use the H, L, or Middle of a previous candle/ channel/ swing on and on.... Things they all have in common Low risk Takes PA into account Set where the trade fails (well in actuality where I think it fails â which may, or may not always reflect what actually happens next) ================================================================================= And donât think for one moment it is always as straight forward as Iâm making it sound⦠sometimes trading gets downright messy⦠PA bounces more than a super ball on steroids But trading during those messy times should be exceptions, rather than the rule â for that is when we should be sitting on our hands Hard for price to head fake us when volume is presentâ¦. Hard for it not too when volume ainât Unfortunately when volume is present, itâs easy for a trader to transform into a dear in the head lights I digressed a bit with this last section â apologies ===================================== Based on your answers I believe I'm orientated now - Thanks Good job being patient today XB RN
Ever contemplate gaps are engineered for a reason... and not simply a happenstance occurrence Price does tend to gravitate back to them (whether it be near term or eventually) Things that make you go; Hmmmmm RN
I have noticed that for sure. I guess I should have explained a bit more about the gap comment. Most of the time the gap puts price way outside the boundary of price that I have on my screen. If it is inside that boundary and a trade sets up, I have noticed that it tends to be a nice trade. I haven't put weight on it one way or the other but now that you mention it, I will take a harder look at it.
So RN you touched on some points that I have been batting around in my head. A nice self vs self convo. ======================== Iâve id that price is ranging; say 45.10 to 45.50 Hence Iâll trade it as such If I were to go long, I would consider it a fail trade once price hit 45.09 If I were to short, I would consider it a failed trade once price hit 45.51 My stop is .04 cents ===================== Response ::-- I do have this context in place as per the way you mentioned above. The part where I have been really going back and forth in my head (not in my trade plan) is where price fails in the trade. There IS a reason to take the trade with a price action reason to place the stop where I do now. My stop varies from 4 cents to 8 cents depending on the candle I enter on. This would be something I would prefer to talk with you via PM on. It's been something I was actually going to use in back study after X amount of trades to see if results would have been different. For now, I am continuing to trade with the way my plan reads. As far as the mental end of small stops, yes it helps for sure. I understand why you mention 4 cents as your stop size. A 15 or 20 cent stop would be (has been) a heavy loss to keep my mind straight on the next trade. In my trading now, those trades would not be taken. -------------------------------------------------------------------------------- =================== Hard for price to head fake us when volume is presentâ¦. Hard for it not too when volume ainât Unfortunately when volume is present, itâs easy for a trader to transform into a dear in the head lights =================== Response -- This I have not incorporated into my plan. I do watch the TS around certain levels on my screen but more for curiosity rather than to trade on right now. I have tried to make my rules as simple and clear as possible. ----------------------------------------------------------