Hey, I appreciate the feedback! In fact, I've had sneaking hunch that this is, indeed, the truth. I only wondered whether anyone out there -- anyone experienced, and successful over the longer-term, in futures trading -- had built his/her career with a "pea-shooter". Perhaps not. Perhaps this just means I need to grow up. Ugh.
Yes, which is why I always use "mental" stops -- which, in and of themselves, are not pegged to a specific price point but, rather, to market behavior. In other words, if my methodology says "buy" and price moves 1.5 points against me, but the factors that triggered my entry remain in force, then I'm still in the trade. Alternately, if my methodology says buy, and the price moves 2 ticks in my favor, and the factors that triggered my entry evaporate, I'm out of the trade. The only hard-and-fast numerical parameter is my profit target -- 1.25 points, no questions asked -- if things move in the intended direction, all systems "go". On average, my losers -- those where my enties were simply wrong -- cost me between 1 and 1.25 points. My winners are 1.25 points, period. Scratches range between -.75 and + .75. I'm currently running hair's breadth short of 70 percent for winners -- i.e., trades that go for the full 1.25 -- with scratches and losers comprising the balance.
Hard profit targets and mental stops--bad bad combo. Farewell and adieu, all of you Spanish Ladies, Farewell and adieu, all you Ladies of Spain--
I am having the same problem. Every book that I read and a lot of people on several message boards tell you to "Let your profits run". I bought the saying too. But this month I realised that if I had actually gotten out with 4 pts. profits, i would have done much better. For example yesterday, I went ES long at 1369.75 with a stop at 1365.75. As ES moved higher I moved my stop. I got stopped out at 1371.75 with a 2 pt. profit. This is just one of the examples from the last 2 weeks. I am a 1 lot trader, if I were trading 2 contracts, it would probably make sense to exit 1 at 4 pt and use a trailing stop on the other one. Anyway, it is something to think about for me before Monday comes . Gotta go, Time to go see the Huskers beat the sad Wildcats!!!!
skippy, Sadly, some of what BuySell posts is tripe (and he does post a lot). The only truth will come from developing a valid theory and then testing it. 3:1 etc are useful values for beginners. Helpful because if you want to use a different number they alert you to the "risk" you are taking. When you are alerted you can then do the hard work to determine what the truth is. A strategy that gives 80% winners and a 1:1 ratio is a good strategy if there is no serious flaw in it. Serious flaws might include a tendency to go off the rails every couple of months and have 200 losers in a row or perhaps 80/1:1 only in theory and not when real slippage etc is included. But if the strategy is robust and real then it can be a very good strategy. The great thing about trading is there are so many ways to win money. And that two people can take the same strategy and one will win while the other loses.
You've got to be kidding. The posts that I make are extremely rich in value and come from 2 1/2 decades of experience. Let me say this: the posts that I read here indicate that there is a lot of newbie/fresh money in the markets. Following my suggestions would be one of the best things a newbie could do. Very little of what I post is tripe. By the way 1 to 1 is ridiculously rookie
LOL ... ROTFL ... got ya I think. Some can equal very little And 1:1 is often a suck in but if someone does the work (hey, when is that not the case) then it can also be the basis of an effective strategy. If there wasn't lots of new money coming in then it would be much harder to make a decent buck in this arena.