Never let a profit turn into a loss. (Good or bad advice)?

Discussion in 'Trading' started by gifropan, Jan 25, 2010.


  1. Market Profile

    D= 8:30-9:00
    E= 9:00-9:30
    F= 9:30-10:00

    etc., etc..
     
    #41     Jan 25, 2010
  2. wutang

    wutang

    gotcha, thanks.
     
    #42     Jan 25, 2010
  3. ammo

    ammo

    what time is your a print and why and what time zone
     
    #43     Jan 25, 2010
  4. ?......the eMini S&P "conformed" to each of those today? :confused: :eek:
     
    #44     Jan 25, 2010
  5. Hi Barth,

    How were the probability stats derived? Are you saying this is across all markets?

    thanks,

    Walt

     
    #45     Jan 25, 2010
  6. Really !?

    The indexes , currencies and bonds are markets that I have not been able to find a tradable set of probabilities based around MP.

    I know there is a structure somewhere in these markets but I have not had the need to look that hard :)
     
    #46     Jan 25, 2010
  7. Hello Walt

    1) By reveiwing the market profile print tendencies by session (overnight vs. pit). I trade based upon the active months statistics, usually around 70-80 days worth of usable data, and then I transition the back month data into the new active until it has enough days to be relevent.

    2) NO!! Some of the Ag products and one soft market has a very reliable structure for Market Profile.
    (Edit: Also two of the meats are pretty good)
     
    #47     Jan 25, 2010
  8. Yep, good point

    My D print is MY time 8:30 but universally D print is 9:30

    Universal TPO's start with big "A" at 8:00 and small "a" at 2000
     
    #48     Jan 25, 2010
  9. ammo

    ammo

    http://www.charthub.com/images/2010/01/24/YTD_ES_MP the user on this site is generous to post these,not myself, the arrrows to the right are nips, to the left are cleavage and sometimes there is a ledge, all three provide good support and resistance points....todays high and low are marked , also notice the 96.5 and 1099 area ,this afternoons stage before the selloff
     
    #49     Jan 25, 2010
  10. Mathematically, that may be true in the majority of well-behaved cases, but someone who scales out half and then sees a huge adverse overnight event occur is a lot better off than the guy hanging on to the whole position in search of the higher target.

    In other words, Scaling out of a long position between 30 and 40 is much better than hanging on for 40 if the price stops advancing at 37, and then craters to 22 overnight.

    Personally, I prefer scaling out for the following reasons:

    1. Lessens the risk factor of unforeseen black swan events. Having a fully loaded position head into a disaster is much worse than one that has already been 50% cashed out.

    2. Tends to accomplish efficient usage of capital, since positions often reverse and consolidate on the way towards eventual targets and there is often a lot of wasted time during that portion of the trade, where your money could be deployed to pursue other new trades. Also, you can always reload the original position when it starts trending again.

    3. Conditions you psychologically to take significant profits more often. This makes it easier to handle the losses that occur after reversals, since you never watch large profits disappear, only small gains or trades that never get off the ground.

    4. To use a phrase from poker - scaling out gains prevents market tilt. Just like the poker player who gets AA cracked or loses set-over-set, it can be psychologically aggravating to watch a perceived massive profit disappear into a loss. Often this can lead to revenge trading, or cause hesitation in subsequent trading. Scaling out avoids that kind of psychological issue in many cases.

    I am usually more willing to move the stop up to preserve 50% of a decent gain than simply to a break-even level. The idea is to pinpoint the relative level of gain that would piss you off it were to reverse and turn into a breakeven or loss trade. There is nothing very rewarding about stopping out at break-even, whereas half your accumulated profit is still a profit.

    Another option is to run a trailing stop that locks in most of the gain once you get close to the profit target. This is to stop those cases where the move gets within a close distance to your target area and then reverses back down quickly.
     
    #50     Jan 25, 2010