I'm still struggling with the whole stop management thing. Out of all my sim trading recently I found that the best way to enter a trade is to place a limit order in the price zone you want, the place where you expect price will go. If you want to go long ES @ 1059.00 because that's the next pullback zone in an uptrend, you place your limit order there. If it gets there, great, you're in; if it dips to 1059.50 and suddenly finds buyers, then you have to decide if there's enough upside potential to chase entry. If there have already been 3 pushes up, then chasing is probably not worth it. As much as I would love to catch a big fat trend day by staying in a trade from start to finish, it just doesn't fit my style. I prefer to work the swings, taking profits and re-entering on the next pullback. In this massive long term uptrend, when support is broken, it's NOT a short signal. Just patiently wait for the next long setup to show. I do like to counter-trend trade, but I only do it on upper trend channel overshoots, never on a break of support because of the strong established uptrend. In pre-market today I shorted after price broke down pretty hard and got nothing out of it. I shorted only 3 pts from what became the day's optimal buying opportunity. I hope that's some help. Glad you enjoy the journal. I hope to learn from my mistakes and one day post numbers like Red_Ink!
I definitely think a max daily loss is a good idea, to preserve your capital and prevent a spiral of revenge trading. The problem with revenge trading is that you tend to want to "get it back" real quick, so you don't wait for the perfect setup at all and that just leads to more losses. The other tricky part of the mental game of trading is patience with scratch trades and making sure you treat every trade as BRAND NEW. You put on a position, it moves in your favor, you move the stop to b/e, then you get stopped out b/e. You do it again, same thing. Now you start letting these previous trades influence your next trade. So now you put on the 3rd trade and say I'm putting in a 2 pt target because it moved over 2 pts the last 2 times before reversing to stop me out, and screw it I'm putting in a 5 pt stop because I'm not gonna get taken out again. And of course that's the trade that goes straight to your 5 pt stop. So you had the chance to scalp 4 pts on the first 2 trades, but were holding for a larger move, then you let those scratch trades influence your handling of the next trade as if the market has some kind of fixed behaviors, and the market, being a very fluid and ever-changing environment, does something different this time. I applaud every trader who gets past these mental hurdles, because they can take away a good portion of any trading "edge" you might have.
Are you, in any way, shape or form, suggesting that SIM results cannot be translated, in any way, shape or form, to real executions with real orders in the real market?. That would seem logical, since in SIM you really have no opponents trying to debit your account as much as possible.
Dunno much about alzheimer's colonel. I have been trying to decipher the pig's ORB magnificent technique, which seems to catch every large move out of the opening (when there is one), and conveniently cook pancakes when the opening is choppy or has small moves. If I learn just that one secret technique (ORB-pancakes let's call it), then I believe all my dreams of greatness will become real in a few short weeks. I'm even prepared to add pancakes to my Boiled White Rice only diet, if this magnificent insight of when to cook pancakes/when to take the ORB, is revealed to me. It appears that a certain 6 tic rule is essential. I like 5 or 7 myself better, but heck, I'm prepared to change and settle for the average 6.
mathematically 0.618 is a very important number. 7 is way off 0.72. 5 is way off 1.18. only 6 is way off 0.18, the nearest, that is why it is the almost best. of course, I use 6.25, since that is the nearest best number. trading is math game
I just wolfed down 4 pancakes with honey dripped on. You forgot to mention the day i told nod i had 4 ORB trades that were losers in a row with 2 handles each = 8 handles behind to start the day and still came out ahead. I do not do many daily reviews because it frankly is not my style. I did a few to hopefully give Nod some encouragement. She is doing VERY GOOD for only being a trader for like 18 months. I fully admit..............i have very few, VERY FEW losing days in a year. Did i quit when i had the 4 losers in a row? Nope, Wanna know why? Because i know i can come back before the day is over and at least get back to even. Do i quit some days when i am well ahead and KNOW i am not as good a trader in the afternoon than the mornings? You betcha. I realize the setups in afternoons in general are not nearly as true as in the mornings. Ok, done, have good weekend. We gonna be sunny and in 60's, not a snow flake at all yet. Any day now for sure. PS: Another reason why you go for it in the morning is just as stated...............if you start out losing.........you have time to either catch a good run to get back even or just peck away at small hits to get back.
Buy S, your goal is to look for a breakout at R. By buying S you are positioned well to take advantage of a BO at R. If R stops price, stay with it unless it breaks under 50% retrace. Reverse the procedure for shorts. What Hog said above will be the difference between making gas money for the week or retiring to Switzerland in a few years.
That's the plan for this tactic, to catch a large opening move or get in early on a trend day. The 6 ticks is chosen because it's a particular measure of strength/weakness that helps weed out false breakouts. I've found that when the opening 5 min bar has a narrow range, the breakout play is "safer", as it was yesterday, because there is room for a strong move before the opposite camp asserts themselves. When the opening bar is very large, there's usually less further move before a pullback and unless you use very wide stops, you'll usually be stopped out. From observation and study of charts it seems you can enter the trade a couple ticks above/below the opening range and nearly always catch enough momentum to lock in the trade @ b/e. That requires strong focus as the opening bar comes to a close. Once of the most useful things I've learned over the past month is the important of looking at larger time frames to know where in the long term trend we are. Not long ago I had market bias based on "it's run up a lot, it's too high", only to see it run much higher. Now I look at the 3 month daily chart and use Keltner channels to see where in the trending range we are. So even though in premarket yesterday ES sold off on the job number, the 1053 support zone at a higher level than the day before confirmed the bullishness indicated by the fact that on the daily chart price was only halfway through its expected trajectory to the upper channel line in a well-established long term uptrend. This, plus the narrow opening doji bar, provided confluence for the ORB trade, especially if it broke to the long side, because a lot of shorts would be trapped and forced to cover. These would be shorts who believed the last pullback off highs to the lower channel line indicated a possible trend reversal and would fail to stage a forceful break through the 20 EMA on the daily chart. I'm sure there was a lot of short fuel ignited on that opening breakout yesterday, because as soon as price hit the premarket high it sold off just as quickly. Al Brooks' book has for me opened the door to price action and overall market movement in general.