My friend with whom I honed my core trading plan automated one of the setups and his system sets a fixed stop and target on every trade (1:2). It's a strategy with a positive win rate and double reward to risk. The fact that sometimes price runs much farther than the fixed target is irrelevant. There's no predictable way to try and outsmart an already solid system. By trying to do that, you generally end up with a worse result. After letting 20-tick or more trades run back to break even and then mismanaging subsequent trades, I decided to go for a fixed minimum target on my trades. The result over time is far better than trying to pick specific targets for each trade. Because I'm not automated, I can afford the luxury of locking in my minimum target and letting the trade run in situations where a much larger target is likely, and sometimes I catch those. But I never let 20 ticks get away from me on a standard trade. If you took 20 ticks on every trade that offers such, would your results over time be better or worse?
I have absolutely no idea what taking 20 ticks on every trade would do for me? Is that bad? I did think about why I chose the targets I chose today, & when you get down to it I had no good reason & no clue. So I looked a little deeper & found that maybe better preparation would lead to better decisons: Looking at today: 1. There was no major shakeout which sometimes triggers a steep move up. There was a double bottom instead. 2. There was resistance overhead from the previous 2 days, so there were probably some sellers around, and the buyers were probably in no hurry to load up. 3. This resulted in a choppier move up with wider swings. 4. Instead of choosing the huge, random targets I had I could have targeted swing highs or just beyond the swing highs, which is where price often reversed today. 5. I don't know if that's always the case in this type of situation, but it's something to look into.
Nothing's "always the case" in trading, we're only looking for more often than not as it relates to a particular win rate/R:R combo. As for knowing what taking 20 ticks on every trade would do for you, it's part of the MAE/MFE studies I did and it was very helpful. About a year ago I had some days where price was hitting 20 ticks or just under and coming back to break even so many times that I conducted a study of 10 tick targets and found that during that period of very low volatility, the 10 tick targets produced a far better outcome over time. I now have ongoing studies of 10 and 20 tick fixed targets vs. choosing S/R targets on trades. In ranges, channels or counter-trend trades the fixed targets are far superior; in a strong trend or strong trending move (such as this morning), flexible targets allow for additional profits.
1st: LONG (-12) Bougt 60-min suppport. No price confirmation. Went up 11, but then came crashing down for the stop. 2nd: SHORT (10) Small retracement in downtrend. Exit for no reason. 3rd: LONG (-10) Terrible. "Thought" it was stalling & going to turn up. Obviously not a good reason to enter a trade. 4th: SHORT (-17) Breakout in a downtrend. Target was LOD which is barely missed. Obviously I shouldn't have held on for a 17-tick stop. 5th: SHORT (-7) This trade & all after were just pure gambling. I felt burned out & gave up. Short in an uptrend. 6th: SHORT (-15) Short in an uptrend. 7th: SHORT (-15) Short in an uptrend. 8th: SHORT (10) Short in an uptrend. 9th: LONG (-15) Long after a double-top. 10th: SHORT (11) Short retracement in downtrend. 11th: LONG (12) Just a guess. 10th: LONG (-58) Just a guess. Cancelled stop & target (until I got out near the low) 11th: SHORT (-18) Just a guess. 10th: LONG (-10) Just a guess. SIM TRADING TOTAL -134 Ticks (minus commissions) 4 Winners 10 Losers NOTES Trades 5 thru 10 were just pure gambling. I got frustrated, burned out, and gave up. Butâ¦â¦â¦â¦â¦.here's the bad part. I've done that exact thing in real, live trading. I've done it more than once. If I had to call it something I'd say it's similar to a gambling addiction. Fall apart mentally, then throw all the money down & let it ride. For me the mental part of trading is extremely difficult for some reason. I must have a lot of mental weaknesses I need to fix. This trading really makes them all come to light. (I don't find the rest of it too easy either). Lots of work to do. I won't be trading live anytime soon. That's for sure. Nowâ¦â¦â¦..how do I fix myself mentally? (The other thing I can't figure out, and I've thought about it a lot, is how it's seems so easy to lose 100 ticks, but whenever I've made a 100 ticks it feels like it took a monumental effort.) I used to scroll thru charts & would try to do the opposite of everything I"d normally do. I still lost.
I enjoy reading your blog. Ups and downs are a part of this job. I don't trade oil, although u get me interested. So maybe you know better then me. But I think you are over trading. It looks like you had a good entry at 7:25am, then I see a random buys and sells all the way back up to 94. In my opinion u don't need to sell it, that play goes up for 60-70 ticks, you don't need to check out of the position until 8 when it breaks the moving average. It's around 94.10 so u would have made 70 ticks there, plus that short that was worth 15 ticks or so. Then u are done for the day, under 5 trades. No reason to keep staring at the screen trying to imagine a pattern while its just chop for 3 hours. It's all my opinion. I am no scalper, and somedays I only take 1 trade. So take it for what it's worth. Keep the work going, u will get it. It took me awhile, cheers
Also this might sound nuts, but u might try taking the P&L off the screen. You might be making descisions based on the dollar value rather then technical reasons.
Though I do not believe stats can be applied directly to trading.., I do believe stats can be applied to our results Life to date (of this thread) Total trades = 119 Total PnL = 7 Losers = 55 Ave loser = (-10.2) B/Es = 10 Winners = 54 Ave Winner = 10.6 ============== Is it any wonder why this crap is inside your head screwing with you ============= btw, My post is not an indictment of any sort..., rather an observation RN
I can promise you that if you want to easily make or lose 100 ticks in CL, trade with or against a strong trend or a strong trending move. It's your choice. Once a key level breaks with conviction, "they" got your back and it's very, very difficult to lose money trading in the direction of the trend following any pullback.
Notice how every little tiny pullback where counter-trend faders think the move is going to reverse is a perfect entry into the trend. While these trend followers are accruing gains 20 ticks at a time (or holding/adding to winners), the CT traders are eroding their accounts 10 or more ticks at a time.