Thanks soonhwei for your comments, this is actually my problem now, once I let the losers run, now I try to let the winners run, and don't have a rule for taking profits, money management is poor anyway too, because today I should end at -$100, and maybe I would not regret so much. bye for now
When trading averages such as futures, by rule i take profits when i am a certain percentage up. It is ususally derived from the average opeing range of the Contract. 0.5% is usuallly a good target for me.
Thanks jokepie, for a 0.5% gain where do you place your stops? I mean 0.25% or less? I would like to ask you all more about profit and stops ratio, later tonight as i'm driving back home...
To be honest with you, I trade more visually than with actual numbers. I use one 10 period sma as a guide. After a lot of screen time, you can see the momentum within the price action using tick charts. So, especially for futures, I trade only runners. My experince with futures is that you can onlly trade a "runner" well. Scalping is just too tricky. Runner is when I see ES/NQ/YM strat spitting candles in one direction. The distance between the candles and EMA tends to grow, confirming the momentum. Once I detect it I hit market order usually 2 contracts. then wait and watch the action. I dont care about the entry price as it is irrelevant to me on the big picture. If I see strenght in the direction of the move on pull backs. I add, else close it. Looking at the loss or profit on a PARTICULAR trade just distracts me and gets emotional (hopeful/ scared). Its in my best interest that I keep scanning the candles and related charts. EMA is like A STEEL CABLE - its not easy to bend. you need substantial force to do so (in the opposite direction) if that happens. That direction/ trend is TEMPERORYLY DONE. Playing the SIDE that wins the MOST times is a key. Playing LONGS in a BULL market or whne the market's been running up (current scenario) and viceversa is the only edge. You can scalp shorts in bull barkets (fade or sell retracements) but its usually not profitabel or Easy to manage. This is utterly based on my experience and hard to explain. Which Broker do you use ?
Having turned my own trading around, I can confirm that it is possible to learn to do the opposite of what you were doing that was losing so much money. The most difficult thing for me to learn to do was to buy/sell pullbacks in a trend, and also to buy/sell new highs/lows in a trend. I started out by practicing in sim and when I realized that no matter how scary/ugly it seems in real time at the hard right edge, it works far more often than not, I became a believer and an avid trend follower in my live trading. I still trade counter-trend, but only upon confirmation and with a tight stop. Having been on the wrong side many times, I now know where and how the amateurs will get trapped, and I exploit that edge relentlessly. Anyone who trades counter-trend with a ridiculous disaster stop knows where I'm going to take my profits (right about where your "price will NEVER get there" stop is), and anyone who averages down against a trending move knows exactly what my unrealized gain looks like; it looks just like their trade, only green. Profitable trading is counter-intuitive to basic human nature on so many levels that the very few who conquer those demons have a feast of dumb money to feed on.
I thought about this for 1 year and a half, I lost big money adding to losers and creating monsters, and when I was lucky and the market reversed in my direction I closed the trade not even at breakeven point: if you are losing 20.000 and you are risking of losing all, and you see that you are losing "just" 5000 ("just" because if you compare 20.000 or more to 5000...) and it happened that the markets continued in my direction and I could end up gaining 20.000... I tried to code with tradestation a strategy that added to winners and basically did the same I used to do, the results where very bad actually.... why? because there is no way to replicate what our mind is able to do, I think that it is capable to adapt to the market conditions and lose money either if the volatility is high or low, if the market is trending or consolidating. one example over all: adding to a winner: a few months ago an italian bank stock Unicredit (the main italian bank) opened at -5% and ended up at + 10%, if I was a good trader and entered at the open and started to add contracts along his way up I would have gained maybe 20.000 and once it was at +5% sold... adding to a loser: if I was in the wrong side do you think that at +5% with a loss of 20.000 I would have sold? of course if I had the money to add I would have lost maybe 100.000 anyway with my strategy I have in mind to replicate in part the opposite of these bad habits, but it is imperative to have losses in control... as the bed trader does when he is lucky and close the bad trades with a loss near break even... I should close very good trades that turned bad at least at break even, today I was up 264 with a trade and ended up my day with -200 ..... hope my english is understandable
Thanks, I hope it helps. The book that i mentioned before. Take the Audio version as its better understood when you hear it. It has techniques, more along the budhist way of meditation and life. The best trick that i learned was to to keep staring at the screen where the price was, all the action was. NOW or the present. I did not engage in clculating my PnL as every tick occured. My goal was to watch these candles and my MA. It all started to work when i kept repeating few lines in my mind being aware that I can control this monkey. When ever I had a thought of adding to a looser (obviously my mind provided me with sufficient reason ). I said fak u B** you have price below your entry and No means no I kept repeating "this is a bull market you know" - a line from Remenescinse of a stock operater" a must read for any one who wants to trade. And will only touch Longs that were actually moving UP. No anticipatory trades (i.e. HUmmm I see a F*cKing support, A line that I DREW, market must Honor IT.) what a dumbarse...I was. OR Let me put my stop right below the support/ Resistance IT is a HOLY STOP no one can touch it. Trading is a career, a profession just like any other. For which you HAve to go to school, pay tuition and struggle to get a job and rise the ranks as you gain experience. Don't expect that there is a switch in your mind that you will flip one day and All will be green. There is a reason why you can't fly a commercial plane untill you gain a certain number of flight hours. EXPERIENCE. SO don't beat ur self - stay in school until IT graduates you.
your indicators may work,havent tried them,but you have too many..ultimately your goal is to trade blindfolded absorbing the market thru osmossis..you mentioned watching multiple mrkts,that 's important,their s/r,see what they do when they touch,that will show you the big picture and the strength /size of players(constant,waning,rising volume) the charts give you that picture, the market profile teaches you rotation...daytrading for 1 or 200 with tight stops is death by a 1000 cuts...beginners trade that way and are gone quick...,trade less often, ,wait for setups,weave into a trade,so when wrong or right you can add,using multiple contracts you can take some off when trade goes your way to increase profits,or take some off when your taking heat to reduce risk. the market breaths,loosen up ,breath with it