"I believe I should start placing my orders just a couple ticks inside where Iâve been calculating reversals or pullback continuations and see if I donât have better luck!" Yes, that may be better than trying to chase after it misses your limit order. A few ticks should not cause you to stop out if the market comes up exactly to your entry. I don't like trailing stops unless its for your 2nd contract. I think its better to leave the stop alone to give the trade room to work. Also, many times on es you need to market to move through your limit order to get a fill unless you are using buy on touch which I am not. so I may be willing to give .25 up for the market to hit my limit and not miss the trade. By leaving the stop alone on my 2nd trade, I did not get stopped out.
the market is always there. so if you do not lose anything and discovered something new, you should smile. there is tons of $1100 move opportunity every day, do not take the missed one as the only one. maybe the missed one is not so good if you look back after the closing. crude shoot to 72.5+ intra-day high! if you bought it at 69.2 or bottom fished, you may net 3k in half day per contract. I missed almost 1.7 point profit becuase I cashed in on my profit pre-maturely, but who knows, that is after-fact. normally crude swings 3point, 4point is pretty normal recently. I once saw 20point intra-day swing when it dropped to 110, then suddenly burst off to 130+ just half hour last year
Time to talk about a trading lesson that many will never be around to fully comprehend because they try to hard. How many new traders come into the game with visions of grandeur? I know i did. Like walking by a one-armed bandit for the first time in Las Vegas with all the coins clinking, bells and whistles, little old ladies with buckets of coins, etc, etc, sooner or later you drop a few coins in the slots and win a few bucks...........you become a believer until you lose the last coin. Same thing in trading (but trading is winnable, unlike gambling in a casino in the long haul). New traders come into the game with no fear, they come in believing this is gonna be easy because a glance of any chart makes it look easy. They trade large in the beginning and get some outsized gains............they can do no wrong.......they are hooked. They mortgage the house, the wife/husband, the kids.....the whole ball of wax. Easy street is but a couple more trades away. Then as they say........the rest is history!!!! A couple hard and fast losses are a wake-up call and a dose of reality sets in. Not to worry.........more time honing a few skills and all will be back on track. Sound familiar? I bet many traders went that route and are still struggling. Wanna know why? Because unlike the casinos which always keep the percentage of losers to winners in the casinos advantage, the traders insist on keeping the number of winners to losers in their favor and come hell or high water they fight like the devil to accomplish that losing battle. Trading is a game of chance.......... so is playing the lottery or betting on the ponies at the poor mans Wall-Street, the local horse track. I do not play the ponies but will drop a dollar quite regular on a dollar lotto ticket. Fat chance i will ever win. But.....I KNOW THAT, so no harm done. A dollar will not buy a cup of coffee so whats the loss of taking a unbelievable shot at a couple hundred million. Someone is gonna win. Ok, back to why the trader is still losing EVEN AFTER developing a decent trading strategy with some very good tactics. Because of the NUMBERS. Remember the trader is looking for much bigger amount of winners to losers so the trader trades smaller thinking the skills will improve before they blow out. That is the wrong strategy. The right strategy is to develope a decent battle plan with LESS trades but with BIGGER amounts of skin in the game per trade. Lets use the ES as example: lets say you developed a good battle plan and unlike before when you developed the skills to procede in the game you really did not make hardly any money but did not get knocked out either. The reason is because you traded tiny numbers and wanted more and more wins with ever larger ticks pertrade to get over the hump. A casino considers all losers as winners. A trader considers all losers as losers. How can a trader reverse that? Well, the trader must develope a decent game plan and MAX that battle plan to his/her advantage by trading LARGE and going for LESS losers. Lets say the trader was doing ES and trading 2 cars per trade and looking come hell or high water to get most of the days range. He/she traded lots of trades trying to make a few hundred dollars a day. Here is a better proven way: Trade a minimum of 20 cars per trade (to start) and go for far LESS handles per winning trade each day. Start going for a minimum of 2 handles + a couple ticks to pay for commissions per day. Do the numbers. Double the number of cars a couple, few times and assume you still do 2 cars + a day. You do not need to master this trading game............but you must understand how the numbers work to be a BIG winner. PS: When trading LARGE there is no such thing as .........."leaving cash on the table" or "I got out to early" because you battle plan is NOT to get most of the move...........your trading LARGE does the magic for you by allowing fewer winners in a losers game for you to be a winner. It is not easy to get the LARGE numbers in your head... Do not fear commissions, they are simple the cost of doing business.
to me, the bottom line is the plan. is trading hard? not at all! I traded t-30 bond future in real money with no experience about it today, toke out more than 30 ticks *$31.25(a decent trade). even I do not know how to enter the pricing, after I entered a trade with a market order, then realzied I do not know how to enter a valid price order. it is easy, just hit a button. but the bottom line is: enter the trade, where to place a stop loss, then ride, either hit the profit target or the market sigals the move is over. the problem is most people can not think in probaility or they have no probaility knowlegde. if 1:3 r/r, then in 10 trades, you just need win at least 2.5 trades, you are ahead of the game. that is the easiest choice to me, but most will think that is teh hardest. if 1:2 r/r, then in 10 trades, you just need win at least 3.33 trades, you are ahead of the game if 1:1 r/r, then in 10 trades, you just need win at least 5 trades, you are ahead of the game. if 1:0.5 r/r, then in 10 trades, you need win at least 6.67 trades, you can be ahead of game if 1:0.25 r/r, then in 10 trades, you need win at least 8 trades, then you are able to break even. most people do trading based on the last R/R plan, of course, they win almost every time, but they end up broken. 9 in 10 win and lose, that is what most people did and are doing. just to clarify hog's point
Yes, the higher number of points you want the lower win% that you need to make a profit. I agree one of the problems is not wanting to take a loss, so as price nears your stop, you may lower it and/or average down in the hope price will reverse to either a profit or break even. Just like as price nears your target, you may lower it since you fear that market may want to reverse and take the profit away plus blow out your stop.
My husband and I are developing an automated system which is in the testing stages using a demo account and nearly debugged or so it seems The most profitable R:R in testing turned out to be 1:2.5, and it's quite profitable so far. We'll see how it plays out when we take it live, but if you have even a slight edge it seems hard to go wrong with that level of R:R.
There was a time when I had trouble taking a loss and either used no stop or moved stops frequently. As of last April, I go into each trade with a hard stop. This is my bet, the amount I'm willing to pay and to lose if the setup becomes invalidated. My only problem now is moving the stop to b/e too soon. I never realized before how this cuts profits short, and eats away at an account when you take max losses but cut potential profits short. My goal this coming week is to leave my stop and target in place, only moving my stop to b/e once the trade has moved significantly in my favor and is near my target. I will use a 1:2 R:R and trail a stop to capture additional profit if price moves easily through my initial target.
You guys missed the point of trading LARGE amounts of cars for LESS amount of ticks. It has nothing to do with reward to risk ratios. David says he needs to clarify my post.................. from a idiot that can not understand how to do a simple trade in 30 year bonds without going to a forum and ask questions. The last thing i need is some rookie jagoff clarify what i post. Enough of this shit/ HOG OUT!!!! PS: I will drop this thread with the hope Nod works out her trading. I feel she will. David needs to understand how odds work in a game of chance.............as it stands now he is clueless. Game theory flew right over his brainless head. One final thought................. Work on understanding game theory in a game of chance. http://levine.sscnet.ucla.edu/general/whatis.htm Google it stupid david beatoff.
trading large cars for less amount of ticks is a sure thing for ruin. if you trade one car, 100lot or even 20lot, the risk is easy to control. just like walk on a very wide bridge, the risk to fall down to the river and get drowned is very slim, almost impossible, only the bridge suddenly collapses. if you trade 30cars contract, you are walking on a very narrow steel line(are you a circus staunt?no), one missed step, you are forever gone! who knows what will happen next minute in the market, for example, you just aim for 1tick move, but the problem is the market may move not in 1tick, may move in 10ticks even 20ticks, this happens frequently, your assumption is wrong! when news hit wire, the market will pay no respect about support/resistance/chart, nothing, just "jack, run, the boat is sinking". can you control the market to move just in assumed step? no! even there is a caculated stop loss there, you may lose far more than your imagination! did you hear about trading halting when you are trading! if you are shorting a company(the chart is pointing down), with large cars, just after you entered, the market suspended. after it resumes, the market released news of 100%preemimu buyout, you are dead and started to own the brokers'money, will you do that! another things includes "your broker's computer is down" or the exechange got technical problems, after the technical bugs get fixed, the market may be way beyond what you think, if you are in that situation, you are dead too! know your strength, know the market, do things accordingly, then you may survive and prosper! I think nodaji is doing good job,she knows her account weakness. do not teach people gamble, teach people how to view themself and view teh wrold.
trading is an ongoing activity.my mentor told me: always keep in mind. put tommrow in account,next week,next month,next year,next 5years in account, protect your capital. do not play hit and run. that is gambling. he told me a story. there is a gambler who likes gambling very much, he only go to one place to play gambling game,every time he loses.finally he tells the game owner, this is his last time, if he loses, he will forever forget about this gambling game and no more customer again. he brought in 20 game dices, each one should be a number from 1 to 20. then he told the owner,he wants to go to batheroom. when he left to batheroom, this owner stolen one dice and saw the number. when his customer came back, the owner all bet the number he stolen (he wants to keep this customer he supposes his customer dices are not all the same) on the remaining 19dices, but he is wrong, his customer played a trcik to him, all dices bear the same number, he went belly up! large cars for less amount of ticks (almost 100% sure in most cases) will put you in ruin.