Don't be too discouraged, you are learning and that costs something. I would definitely go to trading only 1 contract. When you are sitting looking at the charts you might feel like you should be in the markket all the time - which is a mistake of us beginners . When you have the urge to put on a bet, but not a good enough reason, papertrade it instead as a way of learning instead of risking money. I personally like NQ better because of its spiky nature(I scalp) but if you are patient (I am not) then Es gives sure stops which can cut losses
Although you got burned by pulling your stops, a while ago somebody made a comparison of several index futures on this board. He found that during chop you need a stop of 4 pts on nq and 1.5 pts on ES to not get whipsawed. Of course, this depends on your timeframe. Still, the relative size of these figures is spot on, imo.
It is often said, "Don't violate your plan" [which you are apparently lamenting now].... What if you have a shitty plan? A Discipline Dynamo is still going to lose with a shitty plan! You are feeling low for having messed with your stops and averaged into a loser. What if the problem is really that you were "fishin' in a dry hole" on the trade right from the start? Point... (a) stops are arbitrary, no matter where you put them, and (b) you need to pick your setups better [as do we all].
Its all in your ability to execute - your $1500 tuition was already due and payable when you posted your first thread. As I said then - the thread was loaded with b.s. about your decision to trade 5 contracts and not about the real issues. I think I and other mature traders could have helped you recognize the real issues then, but you are now a graduate of the early lessons through the school of hard knocks - no biggie, you have size, you just need to re-assess a little. You will need to trust your plan and take the losses early - you don't suck if you lose, you suck if you lose and then go into denial about the trade you made and then lose more. In contrast to many here, I don't make a streadfast rule that adding to a losing position is always wrong -- adding to a losing position because you are mad and you feel cheated by the market is wrong. If your indicators (and with experience you will read them better and better) tell you that the market is acting suspiciously like a fake out (and it does from time to time) then adding to a losing trade is okay. But, as I said a few weeks back, I don't know what kind of system you have, what kind of stops you use, what your goals are in terms of trade length or risk/reward. Post or PM and advise will surely follow. Peace, And Best of luck.
After looking over the different losing trades, I believe that I have had my stops set to close. It seems that the 1.75-2.0 points stops get taken out, then to move back in my favor; case in point, I went short today ESH4 @1095.25 and stop was taken out @ 1097.00 (high of day). I'm going to trade 2 contracts with a 3.0 point stop. I will add 2 more contracts when trade has turned profit in my favor for a total of 4 contracts. Once I have an average of 4 contracts I would be happy with a 1.5 point profit. Good or bad? Dominic
perhaps.....but take a look at your entry methodology and trade less....just take higher probability....some say that a 1:3 Risk/Benefit ratio is best. Michael B.
or a 4 pt stop to a 12pt gain.........take it in the multiple according to MAE and MFE which is entry methodolgy and time frame dependant.... You can also use time stops to get out early when the trade does not act right. Michael B.
I don't want to get into a dispute with Electric, but setting your stop according to your anticipated reward isn't going to do you any good unless (a) you have a target in mind and (b) you have figured the probabilities of the price reaching your target. You do have control over the target you select, even if it's totally unrealistic. However, you have no control over the probabilities. Therefore, I suggest that you select your stop according to the probability of the entry you're taking. Why did you go short at 95.25?