actually with maturity usually comes concision you assuming I read your posts but you still did not answer my simple question....
Already answered, multiple times. Being answered and hearing an answer are two entirely different things.
very astute question novicetrader69. it can take a long time to figure out what your niche is and survival is key till it is realized. Different markets, trading vehichles, timefraes and on and on so many variations of how to extract $ from markets. I have been all over the place and lost plenty of money trying to figure out what and how i like to trade. and after 11 years i still am not completely sure. But by journaling all trades daily and organizing them in a database/spreadsheet u can start to identify patterns and realize what is working and what is not. I noticed i was losing more on long trades than shorts and more on small and micro cap lo floaters than on mid and large caps. And that Mondays i had the highest % of losing days, and a high % of trades i made after 11am were losers or i gave profits back. so to decrease my loss % i stopped trading longs and micro/small caps. and boom win % is up. Then i narrow down even further what type of shorts i like. gap up and fade, gap down and failed follow thru, high of day rejection and on and on and on.. key is to identify set-ups and track them. ie. make every loss a learning experience and it is a win for the long run. Some people have set-ups that only happen once a week and they get rich others trade over 20 tickers a day with 10's of thousands of shares and get rich also. Find something that works then start adding to your arsenal.
A lot of good chat here on this topic. Great to have various input from everyone. Personally speaking I’ve gone through something lately where I went from trading around 12 products daily opens, high vol periods and closes to now only 1 product that has great liquidity and daily volatility. This was a process worked out with a mentor/ senior trader and head of trading. At first my gut reaction to doing this was not comfortable and I scaled back from mediocre positive results on 12 products to inconsistent results on just 4 products. I was hitting a wall on this first scale back where I was forced to find edge and really be fully cognitive of my edge and take less trades per day. This was good conditioning for me to be out of the markets more and wait in the grass like a sniper for the good trades. I had started to develop edge at this point by looking less to specific price action and more back to having confidence in about 5 different setup types. (Some people hate using the phrase ‘setups’ to describe conditions- I don’t get why) So now I had cut down from a core of 12 products to core of 4. I started to realize that if I wanted to kill it I would have to go deep on my knowledge of each product beyond what I already knew- which was pretty solid coming from a large well known prop firm previously where we had to be solid on each product we traded, it’s correlations, contract spec, external influences, key drivers etc. So to have a deep knowledge and feel for each of the 4 on a daily basis was increasing my situational awareness requirement hugely. I then made the decision to go deep on CL and with small regret say goodbye to Gold, EuroUsd, SP500. Since this move I am applying a pretty solid edge I have developed over the past 6 months and the PNL is reflecting consistent improvement and headspace. I have since added RB as it can be a great hedge on CL. Along with my mentor/ head of trading I’m now looking to add one more back in- in about a month if I want in equities. So personally speaking it took that boiling it right back down to establish a firm base to help me really get to know what my edge was and how to milk the shit out of it. Now I’m looking to bring that back across more markets over the longer term. Hope this helps.
Sorry, I probably wasn’t clear enough towards the end. I went from 12 to 4 to 1. The 1 is CL crude oil. I technically can trade 2now if I want the 2nd being RB Gassoline as it’s a great hedge for CL. But 95% of my trading is outrights on CL. Basically I’m saying to trade 1 product well for 3 months can enhanced and conditioned my trading to a much higher level. This for me is shaping up to be a much firmer footing to the step back into multiple markets goin into 2019 if I want to.
Ok, I hear you. What I wanted to get across is that you do not need some magic formula to make money. You can do it using very simple tools, provided you have discipline. Newbies often think the key is figuring out some magic number for Stochastics or whatever. Do some backtesting and prove to yourself it isn't. Don't take my word for it, and I'm not even trying to sell you anything. Trend identification. This is the basic filter. Determine the trend in the next highest time frame and only trade in that direction. For example, if you trade off 5 minute charts, determine trend from the 60's. How? There are any number of methods, eg trendlines, moving averages, and higher highs, higher lows etc pattern. Will any of them be 100% accurate? Not even close. They will be late in the beginning, right in the middle and late again at the top. You always need to quantify to some degree the strength of the trend. You want to be on the strongest ones, because a weak trend will tend to chop around. Entry. There are two basic ways of buying in an uptrend. You can buy a breakout, which can be defined many different ways. Or you can buy a pullback. There are lots of techniques for identifying the likely duration of a pullback, eg Fibonacci, Elliot Wave, moving averages etc. None will work all the time, but trading is a probability game. Break outs are low probability moves, particularly intraday. Trade management. You have a reason to enter a trade. A pattern or set of rules. At some point in a losing trade, those conditions have failed. That is when you exit. Maybe you get a reversal in the next bar. Maybe a big bar against you. Moves that say buyers do not have the upper hand. A stop loss is more disaster insurance. It really should not come into play except on rare occasions when your trade hits an open elevator shaft. A key component of making money is never letting a profit turn into a loss. Every trade has a noise zone around the entry price, but at some point, depending on time frame and how volatile it is, you can safely say it is in profit. Maybe on the ES, that is $75-100 per contract. Don't let that trade run against you into negative ground. Taking profits is tricky. You don't want to fall into the trap of grabbing the first decent profit you see. It can be tempting to ring the cash register. This is where backtesting is valuable. You can prove or disprove what is the optimal profit-taking technique for your style. Years ago Jim Cramer made a remark that no matter what, he never wanted to give back more than half the paper profits in a good trade. I think that is a good rule of thumb. Cutting losses. This is where discipline comes in. Also your backtesting should have shown you the effect of stop losses and how wide they should be. The one thing that will absolutely kill you as a trader is letting a bad trade get away from you.
Thank you so much @AAAintheBeltway for taking the time to share your experience in terms that will allow most people to benefit from it. Often we don't realize that if we are not understood it is really useless saying anything. nt