Yannis, yes, my exits have more intelligence than the entries as well. I contend that entries are important. not more important than exits. the debate is endless considering other details and views of the market. Personally I trade a market making style. Entries are pretty underrated in that mode, but not random (there is impact on inventory, so it's important). the exits are always the most important factor of any trading strategy, discretionary or not. we agree on that. If you would follow my trading, one might think the entries are random. There are numerous and with a steady pace. however, they aren't random. that's really the only part were we have a small friction in this thread (other threads were large battlegrounds with believers and not believers). so maybe it's a definition issue. I mentioned what I really call a random entry. I don't know many working systems. I know even fewer (none, but maybe they exist) with truely random entries with advanced exits making the system profitable. and if they existed we would know little about them because it's a kind of holy grail imho. on the other hand, I, with other traders trading the same way I do, we are the closest to apparently random entries (even though I don't see them as random). true volatility traders and market makers, we are like that : seemingly random since we follow the stream. we have more common ground in our posts than you seem to imply Yannis. as you wrote, this is not beginners stuff. it's actually the most difficult trading style I think when you try to get there (the easiest once there!) tntneo
what might be the max loss % of account per day or week for a successful daytrader ? it could be futures , fx , stocks , all of the above Also might this same successful trader choose to do either of the below choices if he went red for the week from green in his P+L ? A: stop trading B: slow down trading frequency C: reduce his position size and number of positions D: take a vacation ?
someone could find the time to give me some feedback on my post here. I am trying to go back to my Darvas P+L graph to see if this helps me stay disciplined
As for your first question, you'd have to begin by surveying successful daytraders. Even then, however, you needn't necessarily be able to tolerate what they would tolerate. As for your second, the most reasonable answer would be to cut down your position size until you find out whether your system requires adaptation, you are doing something unusual, or the market is going through a phase that is outside the boundaries of whatever you used to test your system. Simply reducing your activity is not going to tell you anything.
Just 2 cents: Perhaps stop trading in order to review why all previous losing trades were produced individually in order to improve/ reconfirm the fundamental and overall structure of the trading system, before start afresh.
SethArb, If you are relatively new to trading, in order to learn some fundamental money management techniques, I would recommend you read Alex Elder's books (Trading for a Living and Come in my Trading Room.) If you are more experienced, then you can read "The Trading Game" by Ryan jones or a similar book that Larry Williams has published... there's a couple more in that group that are good. The answer to your question depends on how you have sized your bets. Someone who trades with $5,000 - $10,000 per ES/NQ contract looks at percentage-based losses in a different way than someone who trades with $1,000 per contract. In general losses of 3-5% in a day should be a trigger - stop trading and re-examine your approach. But it's better to focus on losses in terms of points per contract. Size everything from there. I usually stop for the day when I'm down 4 ES points or 10 NQ points per contract because I size my trading very conservatively. Two losing days in a row, stop me for the week. Two losing weeks in a row, stop me for the month. When I cannot trade, I papertrade, develop new trading approaches and I am very polite to people Hope this helps.
Five (5) losing trades in a day and or three (3) losing trades in a row will shut me down for the day with a day off the next day. Each trade represents a maximum of a 1% risk.
thanks guys for taking the time to reply .... I am not new to all of this , only have trouble with discipline and avoiding revenge trades when I am having a bad day I ought to take up yoga
The best way to get out of the trap of "revenge trading" is to take a couple of days off. No trading is also a form of risk management. Just my 2 cent.