It took a long time for me to brainwash myself to execute it. To fade the edges of TR and even average down in the 1/3 part of the TR. And to know what to do when it doesn't work. Price cannot stay in a TR. It will break out. So, I had to learn to be ready and set on what I would do when it morphed into a successful BO. That began by defining what a successful BO consisted of. How to identify it and then what to do. To complicate matters what can sometimes look like a successful BO and have the marks of being one can suddenly turn into FBO and then the FBO fails. I laughed when I first heard of such a thing and thought it was just double talk and nigh nonsense. Then I saw it happen. The failure can fail! And suddenly we have a successful BO after a failure of the FBO! It can happen so what must one do in such a case? We have to devise ways in which we will handle such a rare scenario when it does happen. Why does such phenomena happen? Because every BO has institutions behind that BO pushing price but in the same way EVERY BO has OTHER institutions trying to make the BO fail. Sooner or later one side will win and price will go to another level (either a lower level or a higher level) and the cycle repeats. The reasons I learn to trade the entire market cycle instead of just BOs is because BOs of a market cycle only occur about 10% of the time and strong BOs occur about 5% of the time. Of course, individual bar BOs of the bar next to it occur more often but the scalping opportunity is smaller scalps and quickly done. BOs are functions of market probing.
For me, when to exit is generally a function of: 1) price momentum at the moment. 2) the price movement in relation to the price pattern that informed me to enter the trade. For instance, in a wedge top once I short it and price heads down, I am usually out before it reaches the base of the wedge bottom once I get a decent scalp. Especially when and if the ACTUAL R:R is working out to be 2:1 reward to risk or more. 3) The instrument I am trading. Each instrument has its own characteristics about it. As an example, for the NQ or MNQ I try to get a min scalp of 5 to 10 points within the environment of #1 and #2 above. However, on the NQ or ES I will accept 1 point IF price stalls, little or no momentum, and the price action pattern that informed the entry is not working out too good in terms of profit. It doesn't make a lot of sense to exit the MNQ or MES with 1 point profit if the just mentioned PA is the case as 1 pt is so little so unless I happen to have big size on in the MNQ or MES to make 1 pt PT sensible exit or I just want to scrap the trade. In addition, commission wise at some point it is better to trade NQ or ES as opposed to big size in MES or MNQ which really doesn't make much sense any way but there may be times the MES or MNQ size does get big maybe because of some strategy I swapped to in the middle of the trade. 4) In general, I try to get in the ES and MES 1 to 8 points and all the above apply too so what I try to get. Most trades are in the ES and MES are 1-to-4-point scalps. In the NQ and MNQ 5 to 10 points 5) My final arbitrator is momentum and volatility in the session as they can override any expectancy, I may entertain from any price action pattern I am trading. However, that said I know momentum can stop on a dime, so I am fond of locking in any decent scalp profit even if the momentum is good at the exit. It results in a winning trade and a locked in profit in case that momentum just slow down. Because of probing often, a trade will render a potential profit, and I don't lock it in, and an institution pushes back in the other direction and "bam" my paper profit disappears in seconds and suddenly I find my decent scalp in the toilet and I may have to just flush it and get back the loss on a subsequent trade LOL. I have no regrets locking in a profit and if momentum continues in my direction after my exit. I just enter back in again. Commissions are not that terrible for multiple entries and exits on decent scalps. Not if one is winning with high win rates. If they are losing with piss poor win rates then yes commissions will bleed one's account. In summary, PA itself helps me determine when to enter and when to exit and both entry and exit are subject to being moved as PA evolves. You will see me place an entry order and the suddenly move it before it is filled because I see something happening in PA that was not there when I first placed the working entry order. Same thing for the exit. Three things are subject to be changed or moved by me depending on evolving PA. 1) entry 2) exit 3) Stop loss PA dictates all three to me. By that I mean the patterns of PA, the momentum and volatility of PA, the "way" price action is evolving, when I have a decent scalp (for the exit). I have no set entry, exit, SL that I will not move if PA informs me to move it. On my videos you will see me move a long entry stop orders down very often to a tick above the high of the previous bar until it gets filled and keep doing that until it finally gets filled. I don't necessarily "scrap" the trade just because it didn't get filled on my first price I placed it. If the pattern is still viable but I didn't get filled, I will continue trying to get it filled. MOST of the time I can never every set a R:R nor even know it until the trade is all over. PA is totally dynamic, and I cannot dictate to the market what it has to do. There are occasions I will be using a certain the tactic or technique and I will then set an entry, PT, and SL. I will be posting a video on a variable entry but using a set SL and set exit. I have already posted that video in another thread but will also post it here. However, those are special circumstances in which I do use a set SL and set PT, and I explain why but by far in most of my trading is done with no set entry carved in stone, no set exit (PT), no set exit (SL) I know I have gone the long way around the mountain, but you asked. I also realize that it likely would be disconcerting to many traders to trade this way and we all want certainty but unfortunately the market is uncertain by nature. We navigate in a fog.
Here is a way to trade or scalp the ES with a small risks and a set risk and SL. The risk i.e. the initial SL is 4 points (set) and the PT is set at 1 point for the ES. You may ask: how can that be small risks when the SL is 4 points, and the PT is 1 point? It is small because of the probing on every bar and small groups of bars adjacent to the bar the trade is taking place. While the SL is 4 times bigger than the profit target, it is small risk if good entries are made based on price patterns and the prior 2 or 3 bars and the BOs of those bars. Along with the other elements of PA as price oscillates up and down on the entry bar it is highly likely the 1 point PT will be hit before the 4 points SL is hit. So, because of probing the risk is small but again the SL has to be big enough give the 1-point scalp the time and distances it needs to render a profit before the SL is hit. The odds highly favor making 1 point as opposed to losing 4 points. So that makes the risk small. Again, the way the market probes makes this possible. If I do lose 4 points on a trade, I show in the video what I do. Check it out. The video is a replay of live market action but on a SIM and I take the trades on the live SIM as price and bars advance.
Good Evening volpri, LMFAO hAHAHAHHAHAHAH You're writing is soooo funny, because I as a day trader of many years now and tons of practice, I perfectly understand what you are saying.. LOL "piss poor win rates" LOLHAHHA
Hello volpri, Thank you for the write up, very well explained. Yes, me using set/fixed PT and set/fixed SL trade management for ALL market conditions, ALL dynamic, ALL PA patterns, ALL price geometry (speed, velocity, momentum, acceleration, etc.) just did not work for me. I would always find myself with 2-3 losses in row or 2-3 losses in the next 10 years, that would push me to drawdown. Then I start swinging for the fences wishing for a big win to recover the prior losses and get out of drawdown. Getting out of drawdown when scalping fixed PT and SL when scalping as you proved in your other video last week, its a big challenge, the market probes too much intraday. At least for me it was. Techniques are needed and required to get out of drawdown based on PA conditions as needed.
Let's say a trader has a small account and cannot necessarily afford trading with a dynamic SL that can entail bigger DDs before a profit is made especially if resorting to whittling down a technique I have discussed above in posts and shown examples in videos. So, let's assume I am a beginning (novice) discretionary Price Action trader who has a $3000.00 dollar account. What can I trade and how? Well, if trading futures I most certainly would need to stick to the micros. And always start off trading small with 1c. In such a case it is likely better for me to stick to trying to net say $50.00 a day. Or 250.00 a weeks or 1000.00 a month. Since it is a small account and I cannot afford large DDs and cannot afford to dig myself out of big holes when wrong I likely shoud be better off using a set or fixed SL and PT. That way I know what is the max I could lose on 1 or 2 contracts. The problem becomes how can I avoid paper cuts. See, if I am trading with a small account I will most definitely fear losing it all. So what is the solution. The set stop loss protects my account to some degree but how can I avoid it bleeding out in paper cuts? Some rules I need to follow: 1) Determine my entries and exit strategies and techniques. A good one to follow maybe would be say wedge tops and bottoms (three pushes up or down..it doesn't have to look like a wedge) on say a 1m or 2m chart. PRACTICE PRACTICE PRACTICE first a SIM and get real good at reading the techniques and executing them. I would only use real money if I can first make it work consistently on a SIM. I cannot afford to throw my $3000.00 away because I have not yet gotten good at reading PA and executing my strategies and techniques. 2) Widen the SL and use a 4:1 risk to reward to avoid paper cuts. 3) Set them both and just let the trade play out. whatever happens, happens. 4) Do not average down or whittle down. I cannot afford to use such techniques with such a small account. 5) If I lose on a trade after the loss on the next trade or two double up to 2cs contracts, at the very most 3cs, and get it back quickly and perhaps even more on a winning trade. Once I get the loss back go back immediately to trading 1 contract on subsequent trades. 6) Once I make enough to cover my commissions and net $50.00 for the day after commissions (which can easily happen in 30 minutes to 1.5 hours on a 1m or 2m chart) then stop for the day and go shopping or eat a Whataburger or whatever. UNLESS I have a previous losing day then try to trade a few more trades to get back at least some of that previous day's loss. I may have to get that loss back little by little over the next few days by adding a few extra winning trades and making a little more than 50.00 net on those days. 7) Remember the goal is to increase the account by $1000.00 over the next 20 trading days. Then my account will end 20 days of trading with $4000.00. Once I get up to 6000.00 then I can start off each trade with 2 contracts and shoot to net $100.00 a day. I MUST NOT DESPISE THE DAY OF SMALL BEGINNINGS. I MUST LEARN HOW TO READ PA AND LEARN TO MAINTAIN A HIGH WIN RATE WHILE DOING SO. IN 12 MONTHS, I MAY BE PLEASANTLY SURPRISED. Down the road as my account get bigger and bigger I can go to ES or NQ and get away from the micros. I can also increase my size on my entries because I can now afford to do so. Below is a video on a SIM of a few minutes of trading the MNQ on 1-24-2025 showing just how this can happen. Not guaranteed but maybe it does relate the potential. I did mis-speak on the video. The win rate was 100% not just over 83%. I think my brain got mixed up with some earlier trading done the same day. It was 6 trades in this short video on a 1m chart. All winners. Five short trade and one long trade. Again, for newcomers to this journal short entries are the red triangle and covering the short is the blue triangle. Long entries are a green triangle and the exit from the long trade is the orange triangle. The green connecting dotted line means a winning trade. If it were a red dotted line (none in this video) then it denotes a losing trade. Mind you it was around 63 minutes of trading however, much of that time I was busy doing other things and not even watching or trading. Also understand that these were done on a laptop. I don't need high powered computers and 4 screens to scalp. Also understand I am risking 80 ticks (or 20 points) to make 20 ticks (or 5 points). And both are set. So, whatever happens, happens. I did forget and on one trade moved the profit target a couple of ticks. I am so used to dynamic trading of SLs and PTs. All the other trades were set and not moved even 1 tick. Enjoy and don't despise. Laugh if you must but look and study the principles and the rationale. Remember what makes this possible is the way the market probes especially on single bars or small groups of bars. On every bar there are bulls and bears active. That results in probing.