The perfect trade has nothing to do with getting the high or low IMO. The perfect trade in my view is seeing a situation start to unravel, knowing that the odds are getting overwhelmingly stacked in your favor, knowing you can get in with a good low risk stop - hardly thinking or over analyzing the scenario at all - - - and then going all in - full leverage, max contracts/shares whatever. Then the really hard part, holding it till close or stop. This is a key part of my strategy and has a lot to do with identifying directional days. I trade range days as well and have caught the top and bottom several times, it isn't too tough, just set limits at known S/R or POC level (MP stuff), this is standard buisness, R/R asymetric bet outcome type stuff. The great trades are the ones where I know its gonna be a directional day and I just pile in and hold on... much easier said than done because it is a difficult psychological idea to not really have a profit target and let the market just move to higher highs or lower lows all day. Mike
<font face="courier new">GoodTrade + GoodLuck = PerfectTrade GoodTrade + BadLuck_ = OkTrade BadTrade_ + BadLuck_ = Warning BadTrade_ + GoodLuck = RecipeForDisaster</font>
When I voted, I voted for never have, never will buy the day's low AND sell the day's high on the same trade. But, I assumed we were talking about outrights. If we're talking spreads, I do it all the time. Edit: for that matter, I probably do buy the day's low and sell the day's high of each individual leg on most days, because I do a lot of volume, but I usually hedge it so I don't think it counts.
Hey, I read your article, "The Perfect Trade". I liked the statement: I have never pulled off a perfect trade and I never expect to. So Iââ¬â¢m not going to waste my time trying to chase perfection I completly follow that. I alike, have no luck, and after spending all the time researching with my grandfather, I realized that I was wasting my time and should just settle in on a profitable and stable stock.
That's exactly my point. It's easy to understand why we should do this but emotionally it's difficult to handle when we leave points on the table. If you use fixed targets and the market moves twice the distance past your fixed target then you start saying to yourself "let the market determine the target and don't use a fixed target" instead of just sticking to your system.
Jesse Livermore mentioned that the first 1/8 and last 1/8 of a trend are the most expensive. Rockefeller was quoted as getting in too late and getting out too early yet making heaps.... Maria
I've seen similar quotes and also measurement software that shows how much of the move you managed to capture. Some traders measure success as a % of the move. If they capture 20% of the move from the low to high point then that is successful for them.