Neke, I'm not doing that great either this year so far. All we can do is trust ourselves, and the system at hand, having faith that it will all work out nicely in the end. Draw-downs are just a part of business unfortunately. KON
Have to agree with red here, your instincts are just way off. Have you ever traded ESI before today? Or did it just show up on your "biggest movers" list and you suddenly decided to provide some liquidity for all those sellers? Do you realize that it's the very title of this thread that will be your undoing? Taking trades as if on a deadline is one of the worst things you could do to yourself.
No.Heat is on the money with his advice. And I agree with Red-Ink here. You need to learn basic technical analysis. ESI never once even peeked its head above the falling 20-bar moving average Friday. There was NO long signal. At all. The only effective long position on ESI was scalping tiny dead cat bounces off each downthrust and to do that you need take your profit and run if price can't break through the 20 MA, because that means the trend is still on. Someone asked me in my journal the other day for advice on what they need to do to day trade successfully. Here's my reply: "...I don't feel qualified to give too much advice yet, since I'm learning something new every day. My basic advice is to look at how price behaves in relation to a 20-period moving average in your time frame. If that moving average is rising, look to buy when price dips down to it without breaking through. When it's falling look to short when price rises up to it without breaking through. (If it breaks thru but quickly recovers, that's a false breakout and you can still enter with the trend). If the moving average is flat it's either in a range or consolidating, which is where I often paid commissions for very little reward, and so I no longer trade in that zone unless I'm looking to get a position in place for a continuation move. If you watch price behavior in relation to a 20-period moving average on a chart in any time frame you'll see how solid it is for entering a trend, counter-trend trading overextended moves, and catching the start of a new trend. Following a rising or falling moving average is really the same as buying a higher low or shorting a lower high. If price is trading in a range and it's a wide range, then I use stochastics to trade from one end of the range to the other. Stochastics are worthless in a strong trend." Neke, if you integrate this core advice into your trading, you just can't fail. Why? Because it appears you recently instituted good risk management (taking your max loss), and you have a part of the mental game mastered that is holding me back. I struggle to trade with the kind of confidence you have. Just look at any chart and how price behaves around a rising or falling moving average. You don't have to try catching a falling knife or picking a top; just follow the direction of the moving average until it reverses. And that usually doesn't happen until at least 3 legs of a trend are completed.
All these advice threads are useless because: 1. We all trade differently 2. Neke doesn't know who is a pro trader on here and who isnt. Advice here on ET is a dime a dozen. I don't think Neke has any intention of changing the way he trades..at least I havn't read any such post.
Nodoji, im afraid i have to disagree, stochastics are great for trends, why not try this- buy oversold in an uptrend and short overbought in a downtrend. Regardless , you've had a bad trading week. take yourself off somewhere and let the automated trading get you back to breakeven. Once you hit breakeven , try 2% risk, that way you'll make money but you wont hit 4 million im afraid. why not just try to get 50-60% yearly returns, thats really really good and compounded youll hit 10 million easily within a decade.
You are correct, but I use the 20 EMA for the same thing when looking to enter a trend. In a very strong trend, though, stochs can fail badly in the time frame you're trading. In a very strong trend I think your best way to enter is to look at a smaller time frame than the one you're trading and find an entry there using stochs. Look at a 5-min ESI chart Friday. Price opened oversold and quickly became VERY oversold. However, price kept falling and never became fully overbought until just before noon. If you waited for price to become fully overbought on the 5-min chart to go short, you'd have missed the largest move of the day. If you referenced a 1-min or 3-min chart near the open and shorted the first overbought move, you'd be short just before 10:00 a.m. in the 102.00's and caught a piece of a 5.00 move down before any price-moving support was even established. I'm not sure if this the holy grail, but I started referencing shorter time frames for entry points recently and it's been very positive.
Everybody who trades directionally needs a time based rule. But virtually nobody uses one. Strange really. Cause if you think about it, as traders our only job is to keep an inventory of money bobbing and weaving to create alpha. And if your money isnt making any straight away its a bad decision. Neke, like the others said. Take some time off or scale down to ridiculiously low risk levels like 1-5 contracts. You will get it back..just dont force it. Good trading to you.