Actually, I didn't see your post until after I made that post. I think your point of a loss limit is good (if I understand correctly.) What you are saying is: * Don't limit the upside * Limit the downside to (say) 20% off peak before you take a breather Is that correct?
noob, The two best futures contracts to trade are the CL (Crude) and the TF (Russell 2K e-mini). I've been trading the TF for 7 years. You gotta dump stocks and ETFs for day trading. Futures aren't capital intensive and the gains are taxed at 60% long-term / 40% short-term rates. In your tax bracket, that amounts to a savings of about 6K-7K per year on every 100K you make on futures gains over trading stocks/ETFs. Plus, it's a one-liner on your tax form (Section 1256 contracts) no matter how many trades you take in a year. Risk your least in the beginning of a trade and incrementally add too winners if you want to go for more than a scalp. If you go for a scalp, go all-in / all-out and, as you gain more experience, consider incrementally scaling up your scalps as you have more "stop money" to play with [i.e. first, you fish for chum, then you use the chum to catch the big fish]. The overwhelming majority of newbies will trade heavy on their initial position and then take contracts off as the trade goes their way. This mathematically demands higher winning pcts. You can get very nice reward to risk ratios with lower winning pcts necessary if you DON'T trade this way. Good luck.
Exactly! You have restored my confidence in you hahahah Experiment with the % as you will find a level that works well for you. I don't use it any more because I feel I have built up the discipline to manage it now. But yeah I think you understand what I mean and the Livermoore quote is very relevant if you think of your daily P&L as a trade / stock.... i.e. you would be buying more when your p&l is breaking out... of course you would... would you be adding to your p&l when your losing .... of course you shouldn't
Dec 29, 2010: Net of sales: $-78, Net of commissions: $-94 % on capital used: -0.42% % index gain: 0.1% Trade size: 300 Today was a low volume day. The main loss was taken on a fake out. As I'm watching, I'm thinking "there is no volume, this thing is going to tank" but I used the Costanza method to talk myself out of it. Sure enough... Not sure what the moral of the story is today. I don't know how to use the loss cutoff as suggested by others. Should it be loss in a trade or realized losses? I think probably realized losses. Still, too many trades today. So far, I've had 3 up days, 3 down days. Nothing consistent yet. On the plus side, I kept adding on to my trading journal software. That's going pretty well
I guess I've gotta look into it. This looks to be where it's at for multiple reasons. I've never known anyone who trades futures but not like that's stopped me before. Interesting that you also trade Russell 2K. Maybe that will help me Anyway, how do you get IB to let you to trade futures given you have no experience?
This is not entirely true. The only consistency so far is that I can lose or make money independent of the market action. Kind of...
This how I did it... On your up days what is your average positive p&l?... Say it's $100 then when you reach that level put your loss from top in place. I would normally wait till I closed out the current trade and put the loss from top on. Then once it's on and if you reach your loss from top get out of your trades and stop trading. Doing this often enough will teach you to be able to hang onto your gains in a day. The worst feeling by far in trading is turn a positive day into a negative one
"The worst feeling by far in trading is turn a positive day into a negative one" Been there. Done that. WAAAAAAAAAY too often. that is the reason why I added that clause to my trading. Daily/weekly target. I cannot remember how many times I had a good profit by 11am EST and then things would turn sour to the negative side, I would have to fight til the closeing bell just to break even. Not to mention I was stressed out, exhausted and shaken(confidence). I can only concentrate for so long so I give my best first then disapear for the rest of the day. It had been the most significant strategy to keep profits, build confidence and do thing more fun than staring at a screen. I admire those who can do it efficiently all day long, but it is not my case. Cheers
Yeah but what good profession doesn't have a training period. This is his training period. I also guarantee that more optimistic people make it then pessimistic... So OP understand that this poster is probably correct but it does you no good to have these things in you thinking... Prove 'em all wrong!